Car owners are required by law to carry liability insurance that covers personal injuries and property damage in the event of a car accident. There are four categories of car insurance: tort liability, no-fault, choice no-fault, and add-on. These categories differ in whether there are any restrictions on an accident victim's right to sue and whether the insurer pays first-party benefits regardless of who is at fault. The minimum amount of coverage required varies from state to state.
In tort liability states, recovering money from a driver who is at fault depends on that driver having adequate insurance. Unfortunately, many drivers do not carry insurance, or they may not carry enough to cover catastrophic injuries, such as traumatic brain injuries and spinal cord injuries.
Uninsured motorist coverage may not cover property damage.
Many states require automobile insurers to offer uninsured or underinsured motorist coverage in case the driver who causes the crash either does not have insurance or has only the bare minimum liability coverage. In the latter situation, the minimum coverage may not be enough to cover a car crash victim's medical bills. Uninsured motorist property damage is not offered in some states.
Reasons to Purchase Uninsured Motorist Coverage
The goal of uninsured motorist coverage is to pay for medical bills and property damage in case the driver who caused the accident doesn't carry car insurance. You will likely find out whether a driver has insurance on the day of the accident when you try to exchange insurance information. When a driver confesses he or she does not have insurance, you will know to make an uninsured motorist claim on your own automobile policy.
If the driver who caused the accident is affluent and uninsured, you may sue him or her and be able to recover for your damages. However, most people who choose not to carry insurance are not affluent and do not have significant assets from which you can recover damages. These people are considered judgment-proof.
Limits on Coverage
An insurer may not allow an individual to carry more uninsured or underinsured coverage than they carry for their own liability.
Even when drivers do carry insurance coverage, many of them do not carry sufficient insurance coverage for purposes of serious injuries. In those cases, you can file an underinsured motorist coverage claim with your insurer to fill the gap between your bills and the amount you recovered from the other driver's insurance.
Suppose, for example, you are in a car crash caused by another driver, suffer a catastrophic injury, and incur $250,000 in medical bills. If the driver who is at fault carries liability insurance that only offers a policy limit of $50,000, you will be left with bills of $200,000. Although you may find out the limits of the other driver's coverage relatively quickly, it may take time before you realize that your claim is much larger than that driver's policy limit. Often, doctors and hospitals send bills much later than the date you are seen. Moreover, some injuries can take up to a year to fully manifest.
Filing an Uninsured Motorist Claim
If you think you might need to file an uninsured or underinsured motorist claim, you should notify your insurance carrier immediately. Your policy will include language that specifies whether your time to bring a claim is limited. Similarly, your policy will specify your policy limits and what types of accidents the policy covers.
When you make an uninsured or underinsured motorist claim, your insurance company will investigate your medical treatment and your injuries. You have a responsibility to cooperate with your insurance company, but your insurance company, in turn, has a duty to handle your claim in good faith. When insurance companies approach the claims of their insured members in an adversarial way or unlawfully deny claims, they may be subject to bad faith lawsuits.