Uninsured and Underinsured Motorist

Uninsured Motorist Coverage, Underinsured Motorist Coverage, and Making a Claim

If you are seriously injured in a motor vehicle accident, you will incur medical expenses. In fact, the bills you receive may be substantially more that you earn in a year or two of full-time employment. You may not be able to work and provide for your family.

As if to add insult to injury, you may learn that the careless driver who caused the accident did not have insurance. Or, you may learn that the driver only had minimal coverage. Unfortunately, even though state legislatures have made it a crime to drive without insurance and have enacted financial responsibility laws, a significant number of drivers do not carry any liability insurance. In recent years, none of the states in the Midwest have increased the minimum limits of liability insurance even though doctors and hospitals have doubled or tripled the cost of health care in the past twenty years. We recently ran into a situation where one of our clients was in the hospital for less than 36 hours and incurred over $18,000 of medical expenses. The fact is that the majority of drivers who do have insurance do not carry adequate insurance to cover the damages you may incur if you are involved in a serious motor vehicle accident and sustain serious and life altering injuries. The $20,000 minimum limit mandated in Iowa and the $25,000 limit mandated in Nebraska is woefully inadequate in light of the current cost of health care.

What do you do if one of these drivers just ran into you and you are staring at $100,000 in medical bills and have lost your ability to earn a living to support yourself and your family?

Odds are that you won’t be making a claim against the person who caused the accident because most people who drive without insurance don’t have enough money to justify the time and expense of making a claim against them. Generally, people who carry minimal liability insurance do not have the personal resources to satisfy a large judgment.

So now what?

Hopefully, your insurance agent advised you to purchase sufficient uninsured motorist coverage and underinsured motorist coverage so that you will be able to make a claim for the compensation that you are entitled to under the terms of the policy. Due to the fact that you purchased and have been paying premiums to protect yourself from the economic consequences of this contingency, you will be able to make a claim against your insurance company under the uninsured motorist coverage or underinsured motorist coverage provisions of your own policy. Your insurance company is obligated to, in effect, act as if the other driver did have insurance. If you purchased sufficient levels of underinsured motorist coverage, your own insurance company will step up to the plate and act as the other driver’s insurance carrier and provide you with coverage that is adequate to compensate you for your injuries. Uninsured motorist coverage and underinsured motorist coverage provides a source from which you can pay for all of the things that the other person’s insurance would have paid if it existed.

Unless you purchased uninsured property damage coverage, your insurance company will not be obligated to pay for the repair of your car. Typically, uninsured and underinsured motorist coverage is only applicable to injuries sustained by you, members of your family, and by passengers in your car. Of note in some instances, is the fact that your uninsured motorist coverage and/or your underinsured motorist coverage will protect you from the economic consequences of a serious personal injury even if you are not operating your own vehicle. This coverage is applicable any time you are injured in any motor vehicle accident. Even if you are a pedestrian, if your injury arose out of the negligent operation of a motor vehicle that turns out to be either uninsured or underinsured your uninsured motorist coverage and your underinsured motorist coverage will protect you from the economic consequences of a serious or catastrophic injury.

Insurance companies are in business to make money. They are not charitable organizations. Uninsured motorist coverage and underinsured motorist coverage is not a gift from your insurance company. You paid a premium for this protection. Don’t be of the mind set that you are punishing your own insurance company and/or that you are in some fashion “taking advantage" of your insurance company because you need to make a claim against your uninsured motorist coverage or your underinsured motorist coverage.

Do not worry about making a claim against your own carrier. You paid a premium for the coverage and if you need it you should claim it. If we have heard it once, we’ve heard it a thousand times: “But, don’t I have to worry that my premium will go up if I make an underinsured motorist claim.” The answer is: NO, ABSOLUTELY UNEQUIVACY AND EMPHATICALLY, NO!!! The law prohibits your insurance company from singling you out and increasing your premium if the accident wasn’t your fault.

Underinsured motorist coverage is not the same as uninsured motorist coverage. You may find that this coverage is listed on the card you carry in your glove compartment as UI and UIM. UI stands for uninsured and UIM stands for underinsured motorist coverage. State Farm’s declaration page uses “U” for uninsured and “W” for underinsured. Underinsured motorist coverage applies when the person who caused your accident has insurance but the limits aren’t high enough to fully compensate you for your losses.

A couple of examples from cases we recently handled will help us explain the importance of making sure that your insurance agent does a good job of offering you the opportunity to purchase substantial amounts of underinsured motorist coverage. The reality is that we are all only a few seconds away from suffering the economic consequences of a serious personal injury.

CASS COUNTY EXAMPLE

We represented a nurse who was hit head-on on Hwy 34. The accident was caused by a farmer making an illegal left-hand turn directly in front of her. Unfortunately, the farmer only had $250,000 of liability insurance. The medical expenses approached $100,000. The vocational rehabilitation specialist and economist we retained to evaluate the future economic consequences of the injuries pegged the lost earning capacity at approximately $500,000. We were successful in negotiating an agreement whereby the farmer’s insurance company tendered the $250,000 of available coverage and we negotiated the payment of a significant amount of money directly from the personal assets of the farmer. However, our client had only purchased $100,000 of underinsurance motorist coverage. The State Farm agent representing our client apparently never sat down with the client and never explained underinsured motorist coverage nor the importance of carrying underinsurance motorist coverage and the very inexpensive premiums associated with procuring a one million dollar umbrella policy. Our client’s coverage had not been reviewed for more than fifteen years.

RICHARDSON COUNTY EXAMPLE

We represented a young woman who was also involved in a head-on collision. She was life-flighted to Lincoln and the medical expenses exceeded $100,000. Unfortunately, the negligent driver who crossed the center line and caused the collision only had $25,000 of insurance. Our client had $100,000 of liability insurance, however, her agent had only written coverage for $25,000 of underinsurance motorist coverage. Accordingly, our client’s recovery was capped at $50,000 ($25,000 from the negligent driver and $25,000 from her own underinsurance motorist coverage). Had the independent insurance agent written a $100,000 underinsurance policy rather than a $25,000 underinsurance policy, the additional premium to our client would have been in the neighborhood of $5.00 every six months and our client would have received $125,000 rather than $50,000.

DOUGLAS COUNTY EXAMPLE

We represented a woman who was involved in a multi-car accident. She was hospitalized for a week and was then transferred to a rehabilitation facility. The medical expenses exceeded $100,000. The negligent driver only had $25,000 of liability insurance. Upon investigating her underinsurance motorist coverage, we learned that the Independent Agent had written $100,000 of liability coverage for her, however, only $50,000 of underinsurance motorist coverage. The premium for an additional $50,000 of underinsurance motorist coverage would have been less than $10.00 every six months. The agent had never explained underinsurance motorist coverage and our client was clueless as to what this policy provision meant.

If you decide to make an uninsured motorist claim/underinsured motorist claim, we strongly recommend that you find an experienced attorney. These claims require strict adherence to the procedures set forth in the statutes. You can be sure that the insurance company has a cadre of experienced claims representatives and lawyers who are employed for the sole purpose of finding ways to reduce or deny your claim. An experienced attorney who is working for you will keep these people in line.

Although this is not the law in Iowa, in Nebraska, if you win, the court can even award you the attorney fee that you incurred in making the claim.

You also need to be aware of the "statute of limitations." A civil lawsuit to collect uninsured motorist coverage and/or underinsurance motorist coverage and/or breach of contract and/or bad faith must be filed within very specific and certain time periods. Once the statue of limitations expires, it may be difficult or impossible for you to protect your rights.

Insurance law is very complex. Accordingly, we strongly recommend that you find dependable legal representation as soon as possible.

At Rickerson & Kruger, we specialize in personal injury claims and insurance disputes. We have helped hundreds of people with uninsured motorist and underinsured motorist claims and have obtained millions of dollars on their behalf. With decades of experience, our firm consistently prevails in handling personal injury and insurance disputes.

If you would like a free consultation about your insurance claim, call us toll-free at 1-800-SERIOUS (1-800-737-4687). In Omaha, call 498-8600. Or email us at eric@498-8600 .

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

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