So you got into a car accident with an insured motorist but you are worried that the at fault driver’s insurance policy will not be sufficient to pay for the resulting damage from the accident. Don’t fret, there are two types of underinsured motorist coverages, herein called UIM that allows for the recovery of damages not covered by the at fault driver’s insurance policy. UIM coverage is available when an insured motorist has an accident with an underinsured motor vehicle. In other words, an underinsured motor vehicle means it is a motor vehicle that does not carry policy limits that are great enough to cover the insured’s damages.
The first kind of UIM is called Excess Underinsured Motorist coverage. Excess UIM coverage provides benefits to the insured under his own policy where the amount of the at fault driver’s insurance is insufficient to pay for the damages from the accident. As an illustration of excess UIM, suppose the at fault driver only has liability coverage of $15,000 but you suffered $45,000 worth of damages from the accident. You yourself have underinsured motorist coverage with a policy limit of $30,000. In this situation, despite the at fault driver NOT having enough liability coverage to cover the total costs, you will be able to recover the additional $30,000 because YOU have policy limits of $30,000. The $30,000 is the difference between the at fault driver’s limits and the claimant’s damages. Excess UIM is unique because it allows for the claimant to recover to the FULL extent of the claimant’s UIM limits.
The other kind of UIM coverage LIMITS the recovery because it supplements the at fault driver’s insurance limits ONLY to the extent by which the UIM limits exceed the liability limits. This kind of UIM coverage is often referred to as “Reduction” UIM. Here, the amount the claimant may recover is reduced by the amount of the recovery from the at fault motorist. For example, suppose the claimant has UIM policy limits of $30,000, the at fault driver has UIM policy limits of $15,000 and the total damage costs is $45,000. Here, the claimant has greater policy limits than the at fault driver has. In this situation, the claimant cannot recover the full $30,000 under his policy because his policy limits must be reduced by the policy limits of the at fault driver. Therefore, the claimant can ONLY recover the difference between the two policies, which is $15,000.
If you were involved in an accident with an underinsured motor vehicle, you are entitled to recovery. Many insurance companies will attempt to offer you a settlement but often the amount won’t satisfy the total damages from the accident. Your attorney at the Lovely Law Firm will fight to ensure you get full recovery for the motor vehicle accident. Perhaps you don’t recall anything about UIM insurance. It is state mandated that you are offered UIM by your insurance company. If you think you never had the opportunity to accept UIM coverage, you have a claim as well.