Uninsured motorist or underinsured motorist coverage (“UM”) is often overlooked and underappreciated. However, it may be the single most important aspect of your automobile insurance. UM is all about protecting yourself.
How Uninsured Motorist Coverage Works
UM protects you from others who don’t have insurance, or who have only minimum coverage limits. (Virginia requires minimum coverage limits of $25,000 per person/ $50,000 per accident). If you are hit by a driver who does not have insurance, your UM will step in and act like the wrongdoers’ insurance company. If you are hit by a driver who has less coverage than you have UM, then your UM will step in and supply the difference. UM may sound strange, but this is how it works.
For example, if I have a minimum limits 25/50 policy (meaning $25,000 per person and $50,000 per accident) and am hit by an uninsured driver, my policy will provide me $25,000 of coverage. This works for any auto policy of any relative—even my wife–who resides in my house at the time of the accident. Similarly, let’s say I have a 50/100 policy and am injured by a defendant with a 25/50 policy. My insurance will provide an additional $25,000 of protection, essentially giving me $50,000 in total protection.
But don’t worry: the wrongdoer does not get a free ride at your expense. This is because your insurance company can go after the wrongdoer to collect every penny that your insurance company pays you as UM coverage.
Having Enough UM Coverage
Having UM coverage is not the same as having ENOUGH UM coverage. In my previous example that assumed I had a 25/50 policy, what would happen if I lost my leg in the accident? How much money would be available to compensate me for my lost leg? Answer- $25,000. What if I stayed in the hospital for a month and ran up a $200,000 hospital bill? Answer- $25,000. What if I died? What would my family get? Answer- $25,000. You see, in a minor car accident, you can often get away with only $25,000 of protection, but in a catastrophic collision (like a truck crash or fatal car collision), $25,000 of protection won’t even cover your bills.
In my law firm’s experience, way too often the amount of insurance coverage limits our clients’ recoveries. We just settled a double fatality car accident where two brothers lost both parents in a single crash. The defendant only had a100/300 policy. This may sound like a lot, but in the context of losing 2 parents, two $100,000 recoveries is not sufficient. Earlier this year we settled another case where our client was run over in a parking lot. She fell, broke her knee, and needed knee replacement surgery. Her bills were well over $50,000. The man who hit her had a minimum-limits policy, as did she. We were only able to collect $25,000 for our client.
Minimum Limits, Uninsured Drivers, and “Full Coverage”
Unfortunately, in the Richmond and Petersburg communities, there are uninsured and “minimum limits” drivers everywhere. If you drove today, you passed uninsured drivers. In fact, I have a case now where a commercial logging truck was driving without insurance! As you can guess, the logs spilled off the truck and injured my client. Do not assume that the people you share the road with have enough coverage to protect you or your family from a serious car accident–too often THEY DO NOT.
Don’t be fooled by your “Full Coverage” policy either. The term “Full Coverage” refers to the breadth or scope of the coverage, not the dollar amount of the coverage. The term “Full Coverage” has many meanings. For example, it can mean coverage that meets all of the state minimum requirements. Also for example, it can mean that you have insurance against damage done to your own vehicle, roadside assistance, and money for a rental car even if the accident is your fault. However, “Full Coverage” does not mean that you have more than $25,000 of UM coverage or that you will be protected if you are killed or catastrophically injured in a motor vehicle accident.
Getting More Insurance
The good news is that you can take control of these risks. You can do so by buying more UM insurance. Typically the amount of your UM is the same amount as your liability insurance. For example, if you have a 50/100 policy, you probably have $50,000 in UM. If you have a 250/500 policy, you probably have $250,000 in UM. In order to protect our clients from uninsured and underinsured motorists, we recommend at least $500,000/$1,000,000 of coverage. Such a policy will cost a lot less than ten times what a 50/100 policy costs. Ask your agent about the cost—I predict that you will be pleasantly surprised. And it could be the smartest investment you ever make.