If you have been in a car accident, and the other driver was at fault, you may end up making a claim under the uninsured motorist or underinsured motorist provisions of your own automobile insurance policy.
These two different (but related) provisions of your auto policy come into play when the at-fault driver either has no insurance coverage, or insufficient insurance coverage, to pay for the bodily injuries and/or property damage you experienced as a result of the car accident. Read on to learn more about when and how to make a claim under these coverages.
What is Uninsured Motorist Coverage?
The purpose of uninsured motorist coverage is to pay for your medical bills and property damage expenses in the event the at-fault party in your car accident case does not carry any automobile liability insurance.
In a situation like that, you may choose to sue the at-fault driver. Perhaps they are independently wealthy and can simply write a check to cover your bills and expenses. This is pretty unlikely, since people who choose not to carry liability insurance are rarely sitting on substantial assets. And as the saying goes, you can't get blood from a stone, so your better course of action is probably to make a claim under the uninsured motorist provision of your own auto policy.
Chances are, you will know on the date of the accident whether the at-fault party has liability insurance. If the police investigate the accident, they will inquire into the insurance coverage details for every driver involved. If the at-fault driver does not have coverage, the police will likely inform you of this. If the police do not investigate your accident (in most cases, they should), you should still exchange insurance information with the other driver. If the other driver confesses a lack of insurance coverage, that is your cue to immediately make an uninsured motorist claim on your own auto policy.
What is Underinsured Motorist Coverage?
The purpose of underinsured motorist coverage is to pay for your medical bills and property damages expenses in the event the at-fault driver does not carry sufficient automobile liability insurance to cover your losses. Essentially, underinsured motorist coverage is designed to fill the gap between what your bills and expenses are following a car accident and the insurance coverage limits that the at-fault driver’s policy provides.
For example, suppose you are in a car accident and you incur $25,000 in medical bills and $10,000 in property damage. If the at-fault driver carries liability insurance with a policy limit of $10,000, the at-fault driver is underinsured. In a situation like this, you would need to make an underinsured motorist claim on your own auto policy.
Unlike getting in a car accident with an uninsured motorist, it takes time to determine whether you have been in a car accident with an underinsured motorist. You may quickly find out the limits of the at-fault driver’s coverage, but it will take time to determine the extent of your claim and where it fits (or doesn't) within those limits. It will take time to determine how much medical treatment you will require, how much work you will miss, etc. If the at-fault driver only carries state-minimum liability coverage, you may know pretty quickly you need to make an underinsured motorist claim; however, if the at-fault driver has $50,000, or $100,000, in liability coverage, it may be several months before you know you need to make an underinsured motorist claim.
As soon as you know the at-fault driver is underinsured -- whenever that may mean in your specific circumstances -- you should make your underinsured motorist claim immediately.
If You're Making a Claim, Act Quickly
If you find yourself in a situation where you need to make an uninsured, or underinsured, motorist clam, give notice to your insurance carrier immediately. Typically, the time for such claims is limited (sometimes a policyholder is given as little as 30 days to discover the need for the claim).
Limits on the Amount of Coverage
Generally, most insurance carriers do not permit you to carry more uninsured/underinsured motorist coverage than you carry for your own liability. Typically uninsured/underinsured motorist coverage is inexpensive. Insurers do not want people purchasing bare bones coverage for their own liability and loading up on uninsured/underinsured motorist coverage. It would create financial problems for the insurance companies.
Potential For Bad Faith
If you make an uninsured/underinsured motorist claim, you can expect your insurance company will investigate your medical treatment, the nature of your injuries, etc. In some states, these investigations can turn an uninsured/underinsured motorist claim into a bad faith claim against your insurance company.
Every insurance company has a duty to handle claims in good faith. If your insurance company takes an overly adversarial approach to your uninsured/underinsured motorist claim, it may have violated its duty to handle your claim in good faith. Learn more about Insurers and "Bad Faith" in Injury Cases.