The purpose of car insurance is to help pay for damage and injuries when there is an accident. But unless you have experienced it for yourself, you might not realize how often it falls short, leaving an injured driver with big bills to pay—even if it was someone else’s fault. The only remedy is uninsured motorist and underinsured motorist coverage.
Recently, our law firm (Hipskind & McAnninch, LLC) conducted a deep-dive data analysis on our case load from 2018 and 2019. We were curious: How often does insurance covering uninsured motorists or underinsured motorists make a difference to the compensation that clients receive in automobile accident cases?
When we crunched the numbers, the result was significant: Roughly 40% of all cases involving an auto accident either involved compensation from uninsured or underinsured insurance coverage, or could have been helped by it.
In plain English: 40% of our car accident clients have been harmed in car wrecks caused by people who don’t carry adequate insurance. This is a big deal. Suppose, for example, you are in an accident that involves significant injury. The cost of your auto accident (medical bills, time off work, etc.) is, say, $400,000. You win your settlement, but the other party has poor insurance of no insurance. The insurance company only covers half of the total amount you’ve won. How do you get the rest of your $400,000? Chances are the other party does not simply have that lying around.
But, if you carried uninsured or underinsured motorist coverage, your insurance coverage would kick in and compensate you for the remaining amount. Without it, you would have to pay the rest of your expenses out of your own pocket.
We’ve seen this type of insurance make such a difference to the lives of our clients, we thought it important to give a neutral, third-party overview of this kind of insurance and how it has helped some of our clients get the compensation they need to get on with their lives after an auto accident.
Uninsured Motorist (UM) Coverage
In a typical car accident claim, the insurance company of the person at fault is responsible for compensating the injured party for their medical bills, car repairs, and so on. If the at-fault driver doesn’t have insurance, there is no one to pay. The same is true in the case of a hit-and-run since the person at fault is unknown. The victim can try to sue the other driver, but more often than not they are left high-and-dry, having to pay for everything themselves.
Uninsured motorist coverage steps in when there is no one else’s insurance company to go to with a claim. In some states, it is an optional addition to a regular auto insurance policy. Drivers need to think about how they will be able to pay their expenses if they get in a crash with an uninsured driver. Purchasing this extra protection may be a good investment.
Some states require that all drivers carry a minimal amount of uninsured motorist coverage and automatically include it as part of all regular policies. There is always the option to increase coverage if the amount required by law is small. Again, drivers must give some consideration to how a bad accident could impact their finances.
All but two states (New Hampshire and Virginia) require drivers to have liability insurance, but only 22 require uninsured motorist coverage too. It is important to understand your state’s laws and if you have enough protection in the event of a bad accident.
Underinsured Motorist (UIM) Coverage
In some cases, the problem isn’t that the at-fault driver doesn’t have insurance, it’s that they don’t have enough. As mentioned above, 48 states require liability insurance coverage for all drivers. But states recognize the fact that not all residents can afford big insurance policies. For that reason, the premiums are low, but so are the payouts.
Take the example above, where a driver causes an accident but is only insured for bodily injuries up to $200,000. The other driver suffers serious injuries that require hospitalization, surgeries, and ongoing physical therapy. Before long the medical bills top $400,000. Unfortunately, after collecting the $200,000 insurance, the victim’s only recourse is to try to collect directly from the other driver. And let’s be honest: In most cases, if they could only afford minimal liability insurance, they probably do not have the ability to pay anything else.
Underinsured motorist insurance can help pay the extra expenses that aren’t covered by the at-fault driver’s policy. A victim will first collect what they can from the other driver’s insurance company. They can then file a claim with their own company to collect the rest from their underinsured motorist policy.
Like uninsured motorist coverage, some states require it and it is already included in the victim’s policy with the same limit. But only 14 states have this requirement. Again, it is the driver’s responsibility to know what the impact will be of a serious car accident. It is a worthwhile expense to add or increase coverage to make sure you will be taken care of.
Different Rules in Illinois and Missouri
Hipskind & McAninch serve clients in both Missouri and Illinois, and the two states have different rules when it comes to uninsured motorist and underinsured motorist insurance.
The state of Illinois requires all drivers to have both uninsured and underinsured motorist coverage. The amounts of coverage need to be the same, and must also match the amount of liability insurance held. Illinois sets the mandatory minimum of liability insurance at $25,000 for bodily injury or death of one victim and $50,000 per accident, so those are the typical amounts of UM and UIM as well.
Illinois does allow people to request a lower amount of UM or UIM insurance in writing. Drivers should be careful about choosing this option, as they will be responsible for even more costs if they are in an accident caused by an uninsured or underinsured driver.
Missourians are required to have uninsured motorist coverage, but not underinsured motorist coverage. This, unfortunately, leads to confusion and accident victims who thought they would be taken care of, but aren’t. Hipskind & McAninch recently represented a client from Missouri with a very generous UM policy, but no UIM coverage at all. This is a precarious situation to be in!
Drivers who do not purchase UIM coverage end up as part of our underinsured motorist stats. They don’t realize how much the investment can help until after an accident when the money runs out for their injuries. It is up to residents of Missouri to ask for UIM coverage.
Missouri has the same minimum UM limits as Illinois ($25,000 per person/$50,000 per accident) but has one important difference. It allows stacking. When an insurance policy includes more than one car, the policyholder can stack the limits to increase the amount of the damages they can receive. For example, if a family has three cars under one policy and all have a limit of $25,000 of uninsured motorist coverage, the injured driver can collect up to $75,000 in compensation.
While stacking can be a benefit, drivers must remember that it only applies in a crash with an uninsured motorist, unless they have purchased additional underinsured motorist coverage.
Find an Attorney to Help With UM and UIM Claims
Uninsured motorist and underinsured motorist insurance can be confusing, especially since requirements and laws are different from state to state. It is a good idea for all drivers to check their state laws and their insurance policies to learn their exact amount of protection if they are in an accident. It might be time for a “check-up” with your insurance provider to see if you should consider additional coverage. Uninsured and underinsured coverage can typically be found at very reasonable rates.
Hiring a lawyer after a car accident is always a wise move. This is especially true if you are hurt by an uninsured or underinsured motorist. You may need to work with not just one, but two different insurance companies to seek compensation for your injuries. Experienced attorneys like those at Hipskind & McAninch are well-versed in the intricacies of insurance claims and will see that you receive the settlement that you deserve.
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