You were in an accident. You’ve received treatment. Your shoulder still hurts, but you’ve reached “Maximum Medical Improvement,” which means no further treatment will make you feel any better. You hired a personal injury lawyer who has gathered all your medical records and begun the negotiation process with the insurance company.
Fortunately, your attorney was able to negotiate the maximum settlement and they’ve offered policy limits. Unfortunately, the driver at fault only carried $25,000 in liability coverage. Your medical bills are $20,000, your expenses are at $1,000, and the lawyer’s fee is $6,000.
UNDERINSURED MOTORIST COVERAGE
Hopefully, you have an insurance policy with Underinsured Motorist (UIM) coverage. UIM coverage typically pays for your injuries, costs, expenses, etc. that exceed the coverage provided by the responsible party’s insurance. It kicks in when the driver has too little insurance to cover all of your injuries, such as in the example above.
So, if you have $100,000 in UIM coverage, there will be an additional $75,000 to work with to cover your expenses and make you whole. You’d think since you purchased $100,000 in UIM coverage, that’s the amount you’d have to work with, but read your policy carefully. Most UIM policies deduct the amount covered by the responsible party’s insurance. In the example above, that leaves you with $75,000 to work with.
If the responsible party had $50,000 in coverage, and you only have $50,000 in UIM coverage, there probably is NO coverage left to pull from.
One of the questions clients often ask is whether their premiums will go up if they make a UIM claim. Typically, the answer is no. Insurers don’t generally raise your rates if you’re not at fault. In fact, it’s illegal in some states for insurers to increase premiums for an accident that isn’t the fault of its insured. But you’ll want to check your policy to make sure.
If your rates won’t increase for filing a UIM claim, then it’s a no-brainer. File the UIM claim! Get access to the coverage you’ve been paying for, and hopefully, you have enough to make you whole.
These little nuances with insurance can be tricky. And if you’re dealing with an injury and mounting expenses on top of it all, you’re probably stressed. It would be wise to hire a personal injury lawyer to guide you through the process, deal with the insurance company for you and maximize your recovery.