Underinsured motorist coverage (UIM) is optional car insurance that you should purchase to protect you and your family. It covers the gap between the damages an innocent driver suffers in a car accident and the amount of insurance the offending driver carried. Underinsured coverage is needed it is often in the most serious of accidents, meaning when UIM is needed it is really needed.
A True Story about a Former Car Accident Victim
A car accident claim was recently concluded for a client who was T-boned in an intersection by a car who failed to yield. The force of the impact fractured her hip and rendered her new car a total loss. Her doctor soon realized that she needed hip surgery. Her recovery lasted six months and her hip pain has never fully subsided. The offending driver’s insurance carrier was contacted and they quickly learned that he had purchased $50,000.00 in coverage. The cost of the victim’s hip surgery alone exceeded that amount. Her damages increased with physical therapy and follow-up care. The value of this particular car accident case should have
been in the six figure range. Unfortunately, the victim learned from her own insurance agent that he did not sell her underinsured motorist coverage. When she pressed him why he did not add UIM to her policy, he simply replied that she did not ask for it and he was trying to keep her premiums low.
Lawyers who represent clients in car accidents come across many cases in which the client faces financial hardship because the driver who hit them did not have enough insurance to pay for the damages they caused. Without underinsurance, you may be left with uncompensated damages which can cause long term financial hardship. Underinsured motorist coverage is the best way to protect you and your family from a bad outcome following a serious car accident that you did not cause.
What is Underinsured Motorist Coverage?
Underinsured motorist coverage is often abbreviated “UIM” (underinsured motorist coverage). UIM is optional on most car insurance policies. It is imperative for you to add UIM to your car insurance policy because it is the best way to protect you and your loved ones from the financial hardship caused by serious personal injury in a car accident with a driver who does not have enough insurance available to pay losses. I have found that when you need UIM, you really need UIM because you have been seriously injured and the policy available from the offending driver is too small to cover your losses. With underinsured motorist coverage, an ounce of prevention is worth a pound of care.
UIM is Not Required by Missouri Law
UIM is not required to be sold to you as part of your basic car insurance. What is required (in Missouri), is bodily injury coverage and uninsured motorist coverage (UM). Bodily injury coverage is insurance which is used when you cause a car accident and someone other than you is hurt. Rather than pay for the damages you cause out of your pocket, your insurance carrier will stand in your shoes to pay the claim, if warranted.
Do not confuse uninsured motorist coverage (UM) with underinsured motorist coverage (UIM) as they are two distinct types of coverage. Uninsured motorist coverage is insurance which is used when you are injured in a car accident caused by a driver who has NO insurance - they are uninsured. Uninsured coverage (UM) is automatically placed on all Missouri policies at a minimum of $25,000.00. Bodily injury coverage and UM coverage are both required in Missouri.
What happens in situations where you are injured by another driver’s negligence and that driver does not have enough insurance to pay your damages? Who covers the gap between your damages and the defendant’s available insurance? The answer is found with underinsured motorist coverage, UIM.
Underinsured Motorist Coverage is Optional Coverage
Underinsured motorist coverage is optional in Missouri; the coverage is not required by law to be sold nor is it required to be offered. Furthermore, Missouri law does not require agents to offer UIM, even if you specify that you want “full coverage”.
Many car accident victims think that they have “full coverage” on their car. Unfortunately, there is no such thing as “full coverage” because that term means different things to different people. The term “full coverage” is not defined by law or even by insurance contracts. Full coverage is a term of art used mostly by non-lawyers which is meant to describe a car insurance policy which offers all the protection that the policy holder believes they need. The problem with the term “full coverage” is that it means different things to different people. Does full coverage include UIM? It should include it because without UIM you are not fully covered from serious injury. Does full coverage include PIP (personal injury protection) or medical payment coverage? It should because carriers offer med pay at very little cost and it’s useful to defray health insurance co-pays and deductibles and medical bills. Does “full coverage” mean that the policy holder has purchased the maximum dollar amount of coverage, or something in the middle? To be fully covered from loss, one would have to purchase more than a minimum $25,000.00 policy because most people have assets that exceed $25,000.00. To have “full coverage” must the policy holder have purchased an umbrella policy as well? The point is that the term “full coverage” as used in everyday conversation has not common meaning because in truth there is no single definition of full coverage. Whatever the definition of full coverage, at a minimum your policy should contain underinsured motorist coverage.
Underinsured Motorist Coverage is Relatively Cheap and Absolutely Essential
For less than a meal at a nice restaurant, you can add underinsured motorist coverage to your car insurance. Fifty to one hundred thousand dollars in coverage will not add significantly to your total premium. Call your agent or carrier and ask how much adding $100,000 in underinsured motorist coverage will cost. The average family’s policy with a well-known carrier should contain about $500,000 in UIM which costs less than $65.00 for the year. This level of coverage is readily available and will provide its owner with a much needed supplement to a personal injury settlement following a serious car crash. Do not allow yourself to be talked out of underinsured motorist coverage. You may be told that you do not need it or that it is a waste of your money. Realize that you are being persuaded not to buy it for a reason…it is a bad deal for your insurance company. UIM is disfavored by insurance companies because it is inexpensive and results in big pay outs to its policy holders.
Why did my Insurance Agent or Salesperson Not Tell Me About UIM, or Worse, Talk me out if it?
Underinsurance coverage is not promoted by car insurance companies because the coverage is relatively inexpensive and when needed by policyholders, often results in big payouts following serious injury. Claims involving underinsurance necessarily involve people with significant injuries. Additionally, claims involving underinsurance necessarily involve offending drivers who did not carry enough insurance to cover the injuries they caused. Because automobiles have become safer over the years, the majority of car accidents do not result in serious injury; most involve soft tissue injuries which heal with little or no treatment. Those crashes that do involve more serious injury, such as fractures, open wounds or head injuries, often require long and intense medical care. Medical care is expensive and time consuming. Serious injuries also result in wage loss and pain and suffering. If you are seriously injured in a car accident, odds are the individual who hit you will not have enough insurance coverage to fairly compensate you. Underinsured motorist coverage is your key to protect yourself and your family.
Conclusion
Underinsured motorist coverage (UIM) is a smart, cost efficient, proactive way to protect yourself and your family from the financial hardship caused by serious personal injury in a car accident with a driver who does not have enough insurance available to pay losses. It is not required in Missouri and is not suggested by many insurance agents. With the knowledge gained from this article, it is the author’s hope that you will contact your insurance agent and immediately add as much UIM as you can afford.
