Uninsured and Underinsured Benefits: How Do They Work?

IMG_1002.jpgI was hired to represent a man hit by a drunk driver today. Here’s a photo of his car. It’s lucky that he wasn’t killed. However the criminal did not carry liability insurance and does not have collectible assets that we can levy on to satisfy a judgment from a court. Similarly, on Monday, a man driving on I-35 at 65 mph was hit by an uninsured woman who crossed across three lanes of traffic and I will be making a claim or filing suit against his insurance company.

Fortunately, both clients were smart enough to purchase uninsured/underinsured motorists
benefits. This is a necessity since at least 2.6 million Texans drive without the required minimum liability coverage.We drivers in DFW should be even more cautious because we have ranked in the top spot for uninsured drivers for years.

What is Uninsured and Underinsured Motorist Coverage?

Uninsured motorist coverage(UM) and underinsured motorist coverage (UIM) protects you if you are hit in a crash, it is not your fault, and the other driver doesn not have liability insurance. UIM protects you if the at-fault driver does carry enough insurance to pay for your medical bills, lost wages, pain and suffering, and other damages, which may happen if he just has the minimum limits of 30-60-25 ($30,000 for any person injured/$60,000 for all persons injured/$25,000 for property damage).

Texas Insurance Code Art. 5.06-1 was first enacted in 1967 to provide for uninsured motorist protection. It added uninsured motorist coverage in 1976. According to the statute, an “underinsured motor vehicle” means an insured motor vehicle on which there is valid and collectible liability insurance with limits of liability for the owner or operator which were originally lower than, or have been reduced by payment of claims arising from the same accident to an amount less than the limit of liability stated in the underinsured coverage of the insured’s policy. Uninsured coverage typically provides coverage for accidents involving motorists who have no insurance, hit and run accidents, and motorists who have insurance, but their carrier denies coverage or has become insolvent.

How does this work?

The purpose of UM/UIM coverage is to place the injured party in the same position as if the uninsured/underinsured motorist had been properly insured
The standard insurance policy language provides that
We will pay damages, which a covered person is legally entitled to recover from the owner or operator of an uninsured vehicle because of bodily injury sustained by a covered person, or property damage, caused by an accident.

The owner or operator’s liability for these damages must arise out of the ownership, maintenance, or use of the uninsured motor vehicle.

How much UM/UIM coverage should I buy?

I tell my clients they should buy as much as possible, and at least $100,000. The cost for this coverage is relatively cheap, especially compared to the enormous costs of hospitals and surgeries if the crash is a major one. Some companies will add an umbrella policy for very little.

What types of UIM coverage are available?

• Bodily Injury: This will pay for medical bills. lost wages, disfigurement, disability, pain, and other damages. There is no deductible.

• Property Damage: This will pay for the repair costs, rental car, and damge to personal possessions in your vehicle.

How do I collect my benefits?

Like in most legal matters, although you can probably do this yourself, the help of an experienced attorney is invaluable. The claimant has to prove that the underinsured or uninsured driver was at fault and that he or she suffered significant injuries. If you are filing a UIM case, you must first either collect the at-fault driver’s policy limits or take a credit for the entire policy even if it is not offered before you can collect. The paperwork and procedural steps can be intimidating and unclear. For example, a policyholder is required to obtain the consent to settle his claim against the at-fault driver’s company before he can submit a claim against his own company.

The Texas Insurance Code mandates that every auto policy sold in Texas contain at least minimal UM/UIM coverage. The Texas Insurance Code provides that UM/UIM coverage is presumed to exist as a matter of law unless it is rejected in writing by the insured. However, insurers are not required to offer UM/UIM coverage on a renewal policy.

Who is covered under my policy?

Coverage extends to the named insured and any “family member,” who is a person who is a resident of the same household as the named insured and who is related to the named insured by blood, marriage, or adoption.

What if the other driver hit and ran?

The other vehicle that did this will definitely quality you to receive benefits as long there was physical contact between the vehicles, or the at-fault vehicle hits another vehicle that hits your car. But swerving to avoid another car without contact is insufficient.

I am not sure if I bought this coverage. What do I do?

We can check this out for you. And we have been successful on a number of occasions in collecting benefits for people who didn’t purchase UM or UIM when we proved that the insurance company failed to obtain the legally required rejection of coverage.

How do you know if there is coverage?

The injury or damage must “arise out of the ownership, maintenance or use” of the covered motor vehicle. In addition, depending on the facts, other acts, including the discharge of firearms, intentional or accidental, may create liability.
Stacking Insurance Coverage
A policyholder can “stack” his coverage, which means that you can add them together, even if they are on different policies or even from different companies.

Call an Experienced Board Certified Texas Car Accident Attorney

If you or a loved one have been injured in an accident caused by an uninsured or underinsured motorist, you should act quickly to protect your legal rights. If you are in an accident with someone who is uninsured or underinsured, do not settle with the other driver’s insurance company without first contacting our law firm. Call Board Certified Texas auto collision lawyer William Berenson or email us at legalassistant@berensonlaw.com for a free confidential consultation to talk about your injury car accident claim.

Contact Information