Underinsured / Uninsured Motorist Coverage Can Be Invaluable

uninsured motorist coverade,      car accidentFlorida insurance laws, especially as relates to automobiles, can be a tangled confusing mess of coverage types, misconceptions, and legalities, which tend to get even more confusing when consumers are confronted with agents who may not be misrepresenting coverages properly and insurance policies that read like hieroglyphics. 

When it comes to automobile insurance, the type of insurance you have and the insurance that someone who negligently injures you has can be the difference between recovering and not recovering for personal injuries. Quite possibly no insurance is as important as uninsured motorist coverage.

Florida Automobile Insurance Coverages

As a quick primer, Florida law requires all drivers to have personal injury protection (PIP) insurance coverage. PIP protects us by covering certain medical bills and lost wages. But if you are negligent and someone else sues you after an accident, PIP will not pay for the victim’s injuries or damages. That is the role of liability insurance.

Liability insurance is what will compensate someone for injuries sustained at the hands of another who negligently operates a motor vehicle. If you are injured, and the person who injured you has no liability coverage, there is generally no insurance from which to recover damages.

Despite its importance in protecting other drivers, there is no legal obligation to carry liability insurance. Millions of drivers are driving legally without liability insurance, and if you are injured by one of them, you may be left with nothing.

Uninsured Motorist Coverage

This is where uninsured motorist coverage (UM) coverage comes in. UM is a strange but valuable insurance product. As the name implies, UM will pay the damages that you sustain at the hands of another, if that person has no liability coverage. Put another way, UM is insurance that you obtain that “stands in the shoes” of a negligent driver with no insurance–your UM will pay damages that the negligent party would have paid, had he or she had liability insurance.

UM coverage can also be valuable in paying for damages sustained by “phantom drivers.” In many cases, someone is negligent, but that driver or the vehicle is unidentified. Examples may be:

  • A hit and run
  • A truck that loses its load on the road causing an accident, but nobody knows who the responsible company or driver may have been
  • A car that drives erratically and causes an accident, but drives off, as the anonymous car was not actually involved in the accident

In those cases, a UM insurance policy will again “stand in the shoes” of the phantom or unknown driver. The result is that a situation where someone who is injured ordinarily may not be able to recover, now has someone to sue and a fund from which to recover damages.

UM coverage is not just for recovery from those who are completely uninsured. UM is also called “underinsured motorist” coverage, because UM will “pitch in” to make an injury victim whole if liability insurance is insufficient to cover someone’s damages. In other words, UM can stack on top of another person’s liability policy if the liability limits are too small.

Let us assume someone is catastrophically injured in an auto accident, and damages are valued at over a million dollars. The person who is responsible carries a liability policy of only $10,000. Normally, the victim would be able to recover only the $10,000 (absent certain bad faith situations, which can force an insurer to pay over the policy limits, but that is a different topic for a different day).

If that victim has UM coverage of $500,000, the victim may be able to recover from his UM policy. The end result is that the victim would have $510,000 of total insurance coverage—much better than the $10,000 that the victim would have been limited to.

The law requires your UM carrier be notified of a potential settlement with a liability carrier. So in our example, before accepting the $10,000 liability policy, a letter would have to be sent to your UM carrier. If the UM carrier approves, you can accept the $10,000, and proceed with any claims against the UM carrier. If the UM carrier does not approve, the UM carrier would have to pay you the $10,000, and you could still proceed against the UM carrier for the rest of your damages.

And if you are not convinced of the benefits of UM coverage yet, UM coverage can also be obtained even if you are a pedestrian or a passenger in someone else’s vehicle. If a negligent driver injures you while you are a passenger in a friend’s car, the UM policy can be tapped into in the event the other available coverages are insufficient.

Other Legalities of UM Coverage

By law, UM coverage is required—but you can rejected it if you are provided with a waiver of UM coverage, which must be by made a prominent disclaimer, informing you that you are rejecting UM coverage.

Unlike other types of insurance, an insurance carrier cannot raise your rates for using, suing, or obtaining funds from your UM policy.

You can also opt for stacked or non-stacked coverage. Stacked coverage allows you to stack coverage for multiple vehicles into one claim. So if you had three cars with $50,000 UM coverage, and the coverage was stacked, you would have $150,000 in available UM coverage for any one accident.

Uninsured Motorist Coverage vs. Health Insurance

Many people have the misconception that if they have health insurance, they do not need UM coverage. If someone’s liability policy is too small, the common thought is that health insurance will pay the difference.

But health insurance will only pay for your actual medical expenses (and excluding whatever deductibles your policy may have). Health insurance will not pay for pain, suffering, anguish, loss of enjoyment of life, and all the other categories of liability that a negligent driver could be held liable to pay to you.

If you are injured in an automobile or car accident, make sure that all possible defendants and insurance policies are identified. You need attorneys who understand the ins and outs of Florida automobile insurance coverage. Contact the personal injury attorneys of Brill & Rinaldi today for a free consultation about your case.