If you are involved in an automobile accident caused by another driver, you have the right to file a claim against the driver’s insurance company. In this case, the insurance company would be liable to pay for your damages. However, some motorists don’t carry enough or any insurance. If your accident involves any such driver, filing a claim requires following a different approach, and it is best that you know how uninsured or underinsured motorist claims work.
What Does It Mean to Be Underinsured on a Claim?
When it comes to underinsured at-fault drivers, their liability coverage limits are not enough to fully compensate you for your losses. This leaves you in a difficult position because the other driver’s insurance company will only pay up to the maximum limits of the policy, irrespective of the total cost of your damages.
The difference between your total expenses and what the at-fault driver’s insurance pays becomes your responsibility. While this can amount to significant out-of-pocket costs for medical treatment, vehicle repairs/replacement, lost income, and pain and suffering, underinsured motorist coverage can come to the rescue.
While it is possible to sue an underinsured driver to recover the remaining costs, it might not be a practical solution. This is especially the case if the at-fault driver does not have adequate personal assets to cover the judgment, making it a potentially lengthy and expensive legal battle with little benefit.
What About Claims That Involve Uninsured Drivers?
An uninsured driver is one who does not have any auto insurance. According to a report released by the Insurance Research Council, 14% of motorists across the U.S. were uninsured in 2022. That accounts for around one in seven drivers. With these claims, claimants need to rely on their own uninsured motorist (UM) coverage. Hit-and-run accidents, where it’s not possible to identify at-fault drivers, also fall under the purview of UM coverage.
What’s the Difference Between UM and UIM?
Uninsured motorist (UM) coverage and underinsured motorist (UIM) coverage enter the picture if you meet with an accident that involves an at-fault driver with no or inadequate insurance coverage. To understand the difference between the two, consider an example where the medical damages you suffer add up to $50,000, and your UM coverage stands at $50,000.
- Uninsured motorist. In this case, you need to file a claim with your own insurance company for the entire amount.
- Underinsured motorist. If the underinsured motorist’s coverage maxes out at $30,000, you’ll need to file two claims. One will be with the at-fault driver’s insurance company for the maximum available limit, and the other with your insurance company to cover the balance.
In both cases, the maximum you can claim depends on the cover available through your policy.
What the Law in New York Says
Around half of the states in the country and the District of Columbia require drivers to carry UM coverage as part of their auto insurance policies, and this includes New York. The legally required minimum requirement in the state stands at $25,000 per person and $50,000 per accident. If you choose these limits and your damages exceed these amounts, you have to account for them on your own or consider filing a lawsuit against the at-fault driver.
Other minimum auto insurance requirements that apply in New York include:
- Bodily injury (not resulting in death). $25,000 per person and $50,000 per accident.
- Bodily injury (resulting in death). $50,000 per person and $100,000 per accident.
- Property damage. $10,000 per accident.
- Personal injury protection (PIP). $50,000 per person.
What Does Uninsured Motorist Coverage Cover?
UM coverage covers medical expenses, loss of earnings, and some other damages.
- Medical expenses. This includes costs associated with doctor visits, hospital stays, surgeries, medications, physical therapy, and rehabilitation.
- Loss of earnings. Loss of earnings may include lost wages, lost benefits, and a diminished capacity to earn.
- Other damages. Based on the specifics of a case, these may include emotional distress, post-traumatic stress disorder (PTSD), loss of enjoyment of life, and loss of consortium.
What Does Uninsured Motorist Coverage Not Cover?
You must remember that UM coverage in New York does not cover property damage, like damage to your car. In addition, UM coverage in New York applies only within the state, and covers only uninsured motorists and not underinsured motorists.
What Is SUM Coverage?
Insurance companies that provide auto insurance in New York must offer supplementary uninsured/underinsured motorist (SUM) coverage, but you have the option of rejecting it if you feel you don’t need it by signing a waiver. The minimum limits are $25,000 per person and $50,000 per accident. The maximum limits vary based on different factors.
Unlike UM coverage, SUM coverage offers protection across the U.S. and Canada, as well as against underinsured motorists.
Do I Need Uninsured Motorist Property Damage?
If you opt for uninsured motorist property damage (UMPD) coverage, it protects you from financial losses if your vehicle suffers damage in an accident with an uninsured driver. It helps cover the cost of repairs, up to your policy’s limit or the actual cash value of your vehicle. Without UMPD, you would likely be responsible for the repairs or have to file a lawsuit against the uninsured at-fault driver.
The Cost of Uninsured Motorist Coverage
According to the Hanover Insurance Group, the average cost of UM coverage is around $5 per month or $67 per year. Keep in mind that the actual cost depends on various factors like the amount of cover you seek, your driving history, and your location. Ideally, you should match your UM coverage to your policy’s liability coverage. For example, if your policy’s limits stand at $100,000 per person and $200,000 per accident, you should use the same limits for the UM coverage.
How to Get the Most Out of an Uninsured Motorist Claim?
For starters, your insurance company needs to establish that the at-fault driver is uninsured. If you’re filing a claim that arises because of a hit-and-run accident, you will need to provide proof of physical contact that can come in the form of damage to your vehicle, other physical evidence from the scene of the accident, and eyewitness testimonies.
Whether you’re filing an uninsured or underinsured motorist coverage claim, understanding what your policy covers will help you navigate the claims process more effectively. In addition, you must document all the details of the accident meticulously. This requires capturing photos and videos of the scene, obtaining a police report, gathering details of witnesses, and maintaining medical records.
Even if an at-fault driver is uninsured, you still need to notify your insurance company immediately, and failing to do so might jeopardize your claim.
One truth about uninsured motorist coverage is that your insurance company has a vested interest in settling your claim, and it might do its best to minimize its liability or deny your claim. As a result, if you’re hoping to get the most out of an uninsured motorist claim, partnering with an experienced automobile accident attorney might be in your best interest.
The Role of an Automobile Accident Attorney
If you’re involved in an accident with an underinsured or uninsured driver, an automobile accident attorney can help you identify the sources through which you may seek coverage and understand how much coverage your policy offers. Filing a successful claim requires proving your damages, and your attorney can assist you with the same.
Given that insurance companies tend to make low-ball offers to start with, you may count on your attorney’s negotiation skills to arrive at a fair settlement. If both parties are unable to reach an agreement, your attorney can file a personal injury claim in court. If your attorney can prove that your insurance company denied your claim in bad faith, the payout you receive may far exceed your coverage limit.
Conclusion
Now that you know how uninsured or underinsured motorist claims work, keep in mind that you need to fall back on your own auto insurance policy to cover part or all of your damages. Besides, UM coverage does not cover underinsured claims, and there is a possibility that it might not cover all the expenses you incur owing to the accident. On the other hand, SUM coverage offers a safeguard against underinsured drivers as well as accidents that take place out of state.
Even when insurance companies make payouts on claims, their aim is to try and offer as low a settlement as possible. This is why you should consider hiring a personal injury firm to represent your case. Then, your attorney can do all the legal heavy-lifting while you focus on your recovery.