The Underinsured Motorist aka "Barely Legal"

The twin of the Uninsured driver is the Underinsured driver, and is an optional coverage which you can choose.

If you are involved in an accident with an at-fault state minimum insured driver, and your medical bills exceeds the limits of his Bodily Injury coverage, he is under-insured.

BARELY LEGAL

I’ve nicknamed the state-minimum required Bodily Injury and Property Damage coverage “barely legal.”

Many drivers on the road DO have auto insurance coverage. However, since hatred of insurance is like a national sport, many people carry the state minimum Bodily Injury, and Property Damage Liability coverages, thinking that it’s unimportant or they are outsmarting “The Man.”

Here is the cold hard reality which no one seems to inform drivers about.

If you are the at-fault driver in an accident, YOU are financially liable for your victim’s injuries which could translate to enormous medical bills.

Since it’s safe to assume, you do not have a cool half-million sitting in the bank to cover your potential liability. That is why you carry Bodily Injury liability insurance, to bail you out of that financial prison due to an at-fault accident.

If you have only state minimum Bodily Injury liability coverage levels, the insurer is contractually liable only up to the limits of the policy coverage. If that is state minimum, that is the limit of what they pay, and not a penny more.

The balance of that financial liability must be paid by YOU, the at-fault driver, out of YOUR pocket. Whether or not you have that kind of money is not the insurer’s problem. The insurer fulfilled their contractual obligation up to the limits of the policy coverage.

EXAMINE THE CONTEXT

Looking at it in that context, if you the victim of an under-insured driver, and their insurance has paid out up to the limits of their policy. But, you still have thousands of dollars of remaining medical bills, do you believe that “barely legal” at-fault driver will have the money set aside to pay for their obligation to you?

And, if you are the victim of this under-insured driver who has only state minimum Bodily Injury liability, what are your options?

After their insurer has paid out to the limit of their policy coverage to cover your medical bills, you can sue the at-fault driver to have them pay for your remaining medical bills. That seems to be everyone’s quick fix for everything.

Sure you can sue the at-fault driver to cover the balance, but the “sue them” crowd seem to forget how expensive attorney services are, and the time off from work needed for a long, stressful, tedious, expensive process.

And if “barely legal” did not have the money to carry higher Bodily Injury liability limits, it’s unlikely they have the money to pay for the balance of your medical care. Lawsuit or no lawsuit, you can’t get blood from a turnip.

NO COVERAGE. NO CLAIM.

If you have no Under-insured Motorist coverage, you are not able to turn to your insurer for help. An insurer would not even entertain such n absurdity.

So, looked at in that context, is paying for Under-insured Motorist coverage to cover you in case you are the victim of an Under-insured driver and potentially thousands of dollars in medical injuries plus pain and suffering; is it still as expensive as you think it is?

A SIMPLIFIED ILLUSTRATION

You were the only person in your vehicle. You have no Underinsured Motorist liability coverage.

Another driver hits you, and you suffer some serious injuries amounting to $65,000 in medical bills. He is deemed at-fault for the accident.

The at-fault driver has state minimum Bodily Injury and Liability insurance: $25,000/$50,000.

The at-fault driver’s Bodily Injury liability would cover only $25,000, out of that $65,000 medical bills. That means you have $40,000 in unpaid medical bills which is not covered by the at-fault driver’s insurance.

If you had no Underinsured Motorist coverage, then you can’t turn to your insurer. It is not their problem.

Of course, you can go through the stress, hassle and expense of suing the other driver. However, think about it. If all “barely legal” could afford was the state minimum, what are the chances that he will be able to personally make restitution on the $40,000 uncovered medical bills?

SAVVY DRIVERS PLAN FOR BAD DRIVERS

Everyone imagines themselves to be the greatest driver that ever walked planet Earth, and everyone else are bad drivers.

So if you believe that others are bad drivers, why would you trust your life to their driving, and decline to have Underinsured Motorist insurance coverage?

If you do have Underinsured Motorist coverage, you would turn to your insurer, and make a claim under YOUR Underinsured Motorist coverage for the $40,000 in medical bills.

Your insurer will make you whole by paying out on the $40,000 medical bills.

Your insurer would have you subrogate your claim to the $40,000 which you were paid, by transferring your right to collect from the at-fault “barely legal” to the insurer.

Having taken care of you financially, the insurer has the financial means, and can pursue the matter with the at-fault driver in order to collect on the funds they had to pay out to you.

HOW MUCH DO YOU NEED?

It is standard practice to have your Underinsured Motorist coverage match the same amount as your Bodily Injury liability coverage amount. As an example, if your Bodily Injury Liability coverage amount is $250,000; then you would also carry $250,000 of Underinsured Motorist coverage.

FUN AND GAMES

For the "barely legal" drivers who carry state minimum insurance coverages because you think paying for insurance is a “waste” of money, you may think you are putting one over on “The Man” by having only the state minimum.

Do remember that position if you are ever the victim of an underinsured driver.

To paraphrase Dave Chappelle, it’s all fun and games, until it happens to you.

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