The low policy limits required by Illinois' mandatory auto insurance law does not provide adequate coverage to victims of car accidents in all but the most minor car crashes. Underinsured motorist coverage is much more effective at providing protection for your family.
Illinois has a mandatory auto insurance law, but the mandatory state minimums are so low that they provide little protection or benefit to injury victims. All that is required is insurance that provides coverage in the amount of $20,000 per person and $40,000 per accident, with $15,000 of coverage for property damage. Because these limits are so low, the only effective way to protect your family to protect your family against financial disaster from a car accident is to buy as much underinsured motorist coverage as you can comfortably afford.
When a driver has the minimum amount of liability insurance, the most that his insurance company will have to pay for an accident for which he is responsible is $20,000 to any person injured in the accident and a total of $40,000 for any one accident, regardless of the number of people injured in the accident. So, if there is an accident in which five people are injured, then those five accident victims will have to divide the $40,000 between them, with a maximum of $20,000 going to any one accident victim.
These limits are really very low in relation to the damages that are often suffered by car accident victims. They only really provide full compensation to car accident victims who are in the most minor accidents. In fact, if the accident is serious enough to require an expensive diagnostic test such as an MRI or a CT scan, that may not be enough. Anytime that there are more serious injuries or wrongful death, insurance policies for the state minimum do not come close to providing meaningful compensation to accident victims. Sadly, my experience has been that the worst drivers, who cause the most catastrophic car accidents, carry minimum insurance.
It is true that if you file a lawsuit, you can pursue the case to verdict and then collect the other driver’s personal assets. However, to get to that point, you have to:
• File the lawsuit
• Do all of the pre-trial investigation
• Try the case to verdict
• Obtain a favorable judgment
• Seize assets of the defendant in post-judgment collection proceedings.
If this is going to result in additional monetary recovery, the defendant must both:
• Have assets; AND
• Not declare bankruptcy once you start seizing assets.
Most people who are involved in a car accident simply want to be able to reach a fair settlement for their injuries. Very few people want to try to pursue someone into collections after filing a lawsuit.
The harsh reality is that trying to collect the personal assets of an at-fault driver is often a time-wasting money loser. In most counties in Illinois, even the simplest car accident case takes at least 18 months from the time a lawsuit is filed to reach trial. Many times, that wait is two and a half or three years. The other factor to consider is the actual cost of going forward to trial. Once the cost of filing the lawsuit, serving the defendant with suit papers, doing pre-trial investigation, and calling witnesses (including doctors) to testify at trial is considered, the cost of presenting even a simple car accident at trial will be $3,000 - $5,000. It could be much more expensive if there are complex issues in the case. Additionally, most simple car accident cases take a minimum of two full days in court, often running longer.
When faced with the reality of accepting a settlement for an inadequate insurance policy limit, most people make the decision to settle their cases – even when the policy limits do not provide them with full compensation. This is why many cases that result in large jury verdicts come against large companies or institutions that either have large insurance policies or sufficient assets to pay the judgment.
To protect you and your family against the financial consequences of a car accident with a driver who does not have adequate insurance to cover the full cost of a verdict, the most effective step you can take is to carry adequate amounts of underinsured motorist coverage. Underinsured motorist coverage compensates you and your family when you are involved in a serious accident with a driver who does not have adequate insurance coverage for the injuries caused in a car accident, and you carry insurance with higher policy limits. When that happens, your carrier will make up the difference between the at-fault driver’s insurance coverage and your underinsured policy limits, up to your policy limits.
That can be a lot to digest, so an example may help:
Let’s assume that you are rear-ended by a driver who carries insurance for the state minimum (20/40) and you carry underinsured policy limits of 50/100. Let’s also assume that you sustain $45,000 in damages. In that case, the at-fault driver’s insurer would pay you $20,000 in liability coverage, and your insurer would pay you $25,000 in underinsured motorist benefits, so that you receive a total of $45,000 in compensation for your injuries.
Of course this coverage is subject to your policy limits, so even if you sustained $60,000 in damages, the most you could ever receive in underinsured motorist benefits is $30,000, for a total of $50,000 in compensation.
Underinsured motorist coverage is sometimes included in the uninsured policy limits, so if you have any questions about whether your policy includes underinsured motorist coverage, you should ask your agent.
Pursuing an underinsured motorist claim can be a very complex undertaking, and failing to properly follow the steps required to set one up can result in the denial of your underinsured motorist claim. Given that these are by their very nature claims that involve significant injury or death, we strongly recommend hiring an experienced personal injury lawyer to assist you with your claim.
