You, I, Me?
If you read my last blog about Uninsured Motorist claims, commonly abbreviated as UM, you are familiar with some of the lingo and acronyms utilized to describe this type of insurance claim.
Now, I am going to make it even worse.
Underinsured Motorist (UIM) claims. There is a “you,” an “I,” and an “M.” Think about it as you, I, and me as a way to remember. What it means, how it works, and why everyone should be familiar with this type of insurance will be addressed below.
The Other Person Had Insurance, so Why Do I Need Insurance?
Many people are confused as to why they need UIM coverage. If the other person was insured, why would your insurance even be relevant?
Because the other person’s insurance may be inadequate to adequately compensate you for your injuries and damages.
Similar to an Uninsured Motorist (UM) claim, in which the other person had NO insurance at all and your insurance steps into the void to compensate you for your damages, Underinsured Motorist (UIM) insurance helps you when the other party does have coverage, but it is not enough to cover your damages.
Where Does UIM Coverage Come From and How Does It Work?
When you take out insurance, you are given the right to decline underinsured motorist coverage. Unless you do so in writing, your coverage for UIM should be equal to your liability limits.
In other words, if you take out insurance with limits of $100,000 per person/$300,000 per incident, your limits for UIM will be the same.
An example of how UIM coverage works: imagine that you are involved in a serious crash with a driver who rear ends you at high speed. You suffer a serious back injury that requires surgery, and you miss six months from work as a maintenance technician. Between medical bills and lost wages alone, your costs are $200,000. You are also entitled to recover damages for pain and suffering and loss of a normal life.
Let’s say the other driver’s coverage was the Illinois state minimum of $25,000 per person per incident and $50,000 per incident. Without too much effort, you should be able to convince their carrier to tender its policy limits of $25,000 to you. But before you do, you should make a claim with your own carrier. If you had liability/UIM limits of MORE THAN that coverage, you could claim up to the difference between the two limits. So if you had coverage of $100,000/$300,000, your claim would be for $100,000 minus the $25,000, or up to $75,000 additional.
Beware, you must receive written permission from your own carrier to accept the policy limits of the at fault driver before you do so! Otherwise, you may jeopardize your coverage for the entire claim.
Go back to the example of you being rear-ended and sustaining the serious back injury and all the missed work. Let us add a passenger to your vehicle, say a spouse, who sustains a fractured arm and cannot work at their job as an iron worker for a year.
The other driver had coverage of $25,000 per person per incident and $50,000 per incident. Yes, that means you and your spouse are left to split up $50,000. And the most either of you can receive is half that. Hardly enough to fairly compensate either of you!
If you did not have UIM coverage, you’d be out of luck.
In our example, you would now have claims of $300,000 minus $50,000, or $250,000 for you both to pursue. While this is still probably nowhere near the value of your claims, you at least are not stuck with the minimal coverage of the at-fault driver’s carrier alone.
How Much UIM Coverage Should I Have?
As much as possible.Think of it this way. Assume you are driving with friends to go to lunch (once COVID restrictions make that realistic). Same crash. All four of you are seriously injured, with fractures, long recoveries, missed work, household help hirings required. Some big claims.
If you had the misfortune to be hit by the driver with the minimal coverage of $25,000/$50,000, you four are stuck with $50,000 maximum.What if you had increased your UIM and liability limits to $1,000,000. Wait, you say, who would need a million dollars in coverage?
You four could easily have your cases aggregate to that figure. So, while a million dollars sounds like a ton of money, it really isn’t in this case.
Did that scare you into reviewing and increasing your limits? I sure hope it did!
Contact Chicago Personal Injury Lawyer Stephen Hoffman
As in all cases involving injury and potential liability, if you have been hit by a vehicle immediately get medical treatment, report the crash to police and your own insurance company, and contact a lawyer with expertise in your type of case, such as bicycle accidents or pedestrians hit by cars.
If you've been in an accident and have questions, contact Chicago personal injury attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has nearly 30 years of legal experience and has collected millions of dollars for his clients. He is listed as a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited. He is also an Executive Level Member of the Lincoln Square Ravenswood Chamber of Commerce.
Stephen handles personal injury claims on a contingency fee basis, which means you don’t pay anything up front, and he only gets paid if you do. Don’t wait another day; contact Stephen now.