Uninsured Motorist Coverage - What is it?Apr 03 '01 (Updated Mar 19 '02) Write an essay on this topic.
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The Bottom Line In our day and age, automobile insurance is a necessity, not a luxury. If you drive, get insured.
What is uninsured motorist coverage? One thing it definitely is not is easy to understand. Many states have financial responsibility laws which require persons operating automobiles to obtain liability insurance in the event the driver of that vehicle is at fault in an accident which causes personal injury or damages to another person. But as we all know, not everyone complies with the laws, or not every state has a financial responsibility law. Uninsured motorist coverage, no matter what you may think, is not free insurance. A driver who does not have insurance, and who injures another person with his vehicle is not protected by uninsured motorist coverage. The idea behind uninsured motorist insurance is to protect the persons who do have insurance from drivers who do not have liability insurance. HOW DO I GET UM COVERAGE? In most states, liability insurance policies must provide a minimum amount of coverage for insurance consumers. For example, in Tennessee, a consumer purchasing a liability insurance policy will be insured for no less than $25,000 of coverage. If that consumer is at fault in an auto accident, his insurance carrier will pay up to the $25,000 policy limit to an individual injured as a result of his negligence. The consumer has purchased an insurance policy that will pay the financial debt incurred as a result of his legal liability. So, if the consumer (We'll call him Joe) injures another driver (Bob), and Bob doesn't have insurance, then Joe's insurance carrier pays for Bob's injuries. But what if Bob (who is uninsured) hits Joe and Joe suffers serious injuries? More than likely, Joe is not going to recover a dime from Bob. There is no insurance company to go after...or is there? States have deemed it unfair to punish responsible drivers who carry liability insurance by leaving them out to dry when they are injured by uninsured drivers. So how do they protect responsible drivers? Included in Joe's $25,000 insurance policy is an uninsured motorist coverage clause. When Joe pays his premium each month for the $25,000 liability policy, he is also getting the protection of uninsured motorist coverage for the same policy limits as his liability policy ($25,000). If he is injured by an uninsured motorist, he can recover up to $25,000 for himself in damages. HOW DOES IT WORK? Responsible Joe, with an insurance policy of $25,000 is driving along and enters an area of construction. He slows down to a complete stop due to traffic ahead of him and uninsured Bob drives into the back of Joe's car at a high rate of speed, causing $5000 of damage to the vehicle and sending Joe to the hospital with $15,000 of medical bills. Joe cleverly calls his attorney to sue Bob for $20,000 but finds out Bob has no insurance and did not even own the pants he was wearing. Instead of giving up and taking a $20,000 loss, Joe's attorney brings a lawsuit against Bob, and at the same time, sues his own insurance company under his uninsured motorist policy coverage. In Court, Joe's attorney proves that Bob was at fault and that Joe actually sustained $20,000 of damages. Later in trial, when the jury is not listening, Joe's attorney proves that Bob was not insured at the time of the accident and that Joe had an insurance policy in effect at the time of the accident with uninsured motorist coverage. When the jury returns, after considering Joe's case, it renders a verdict against Bob (Not against Joe's insurance carrier) for $20,000. Bob doesn't pay a dime, but Joe's insurance carrier coughs up $20,000. UNDERINSURED MOTORIST INSURANCE Take another example. Joe is insured with an insurance policy with limits of $100,000. With that policy, Joe is also protected with the same amount of uninsured motorist coverage ($100,000). Along comes Bob and rear ends Joe to the tune of $75,000 in damages. However, Bob has wisened up and since the last accident, he has obtained liability insurance in the amount of $50,000. Joe calls his attorney again who is more than happy to take Bob to court. Miraculously, the same jury is called back to hear the new case and returns a verdict against Bob in the amount of $75,000. Well, Bob's insurance company pays Joe its $50,000 policy limits, leaving Bob responsible for the remaining $25,000, but of course, Bob can't pay it. Bob is UNDERinsured to the tune of $25,000. Joe is still in a good position. His uninsured motorist coverage is also UNDERinsured motorist coverage. Joe's attorney brought suit against Bob and AGAIN brought suit against Joe's own insurance company. Since Joe proved $75,000 of damages and proved that Bob (a) was at fault and (b) had less than $75,000 of coverage, then the remaining $25,000 for which Bob is responsible for will be paid by Joe's own insurance company under his UNDERinsured motorist coverage. If Bob had no insurance at all, then of course Joe would have recovered the full amount (up to his policy limits of $100,000) from his own insurance company (just like in the first example). HIT AND RUN DRIVERS Back to responsible Joe. He is insured for $50,000 and is struck from behind by a driver who leaves the scene of the accident and is not capable of being identified. Joe suffers bodily injuries of $15,000. Joe and his brilliant attorney will be able to recover his damages of $15,000 under his uninsured motorist coverage by filing suit against John Doe (literally) and again serving Joe's insurance company with a copy of the lawsuit. In many states, it is not allowable to let the jury know that there is an insurance company involved. This might lead the jury to hold against the insurance company simply because they have more money and can “afford” to pay the injured party, even if they might not be fully liable for the money. Therefore, Joe's insurance company hires an attorney and defends "John Doe" as if he was their client. It doesn't take much sense, though, for a jury to figure out that SOMEONE is flipping the bill. Attorneys aren't in the business of suing just for the fun of it. MISS AND RUN DRIVERS Good old Joe is insured for $50,000. As he drives down the street, he notices another vehicle coming straight towards him in his own lane. Believing this approaching vehicle is going to collide with his own, Joe swerves right, avoiding the collision, but running his automobile into a telephone pole. The driver of the other vehicle disappears into the night, never to be seen again. Joe's car sustains $10,000 of damage and he is injured with $10,000 of personal injuries. In such a case, if there are no witnesses to the accident, then Joe is not likely to recover under his insurance policy - even with his uninsured motorist coverage. In cases where accidents are caused by another vehicle but there is not contact between the two vehicles, or there is no witness to say that another vehicle in fact caused Joe to swerve, then there is no liability on the part of the insurance company to pay anything. By refusing to pay such claims, the insurance company avoids paying for those accidents which were in fact caused by the negligence Joe and not some third party. Otherwise, if Joe swerves off the road and runs into a tree while shooing a bee out of his automobile, then he might get the idea of reporting that a phantom car ran him off of the road in order to collect his insurance proceeds. CONCLUSION Liability insurance is no longer an option, it is a necessity. If not for fear that you will collide with someone causing life ending or life debilitating damages to another human being, then for fear that you will be struck by some uninsured driver. The number of drivers on the road who don't have insurance, who drive while intoxicated or without having enough sleep, while reading the paper, shaving, putting on lipstick or while talking on cell phones are all reasons to walk (don't drive) to your local insurance agent and purchase a modest insurance policy for you and your family. Protect yourself and the ones you love. Be responsible.  |
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