UNINSURED/UNDERINSURED motorists coverage (UM/UIM)
Uninsured Motorist Coverage – Pays you for property damage or bodily injury if you are in an auto accident caused by an uninsured motorist (a driver who does not have the minimum level of insurance required by law). Claims that you would have made against the uninsured driver who caused the accident are paid by your own policy. Uninsured motorist coverage does not pay benefits to the uninsured driver.
Remember, more than 1 out of every 10 New Jersey drivers does not have car insurance, so this type of claim comes into play often – more than 10% of the time. So if someone runs you over and has no insurance, or leaves the scene [and therefore you don’t know what, if any, insurance they have], then you make an Uninsured Motorist claim against your own company, just as if they insured the guy who hit you.
Underinsured Motorist Coverage – Pays you for property damage or bodily injury if you are in an auto accident caused by a driver who is insured, but who has less coverage than your underinsured motorist coverage. When damages are greater than the limits of the other driver’s policy, the difference is covered by your underinsured motorist coverage.
If the bad guy has no insurance you can make an Uninsured Motorist/UM claim, if the bad guy has insurance but it is not enough to cover your damages, then you have an Underinsured/UIM claim (assuming that you have more UIM coverage than the defendant has).
Please note that the limits of your UM/UIM claim are up to the limits you purchased. For example, if you only purchased $50,000.00 in UM/UIM benefits and you are suffering from a herniated disc, nerve damage, lost 6 months from work, had surgical procedures, etc., then the maximum gross recovery will be the $50,000 limits of your UM/UIM coverage. We recommend that you raise your UM/UIM coverage up to the amount of liability coverage you decided to protect yourself with.
We frequently have clients who did not realize how likely an UM/UIM claim is until it’s too late. They stuck themselves with a small policy, even as low as $15,000.00 in UM/UIM coverage, and it wasn’t enough to cover their lost wages alone. Now you know. If you want to come by the office with questions, or for us to review your car insurance declarations page, please give us a call, or send an email to us.
We never make a recommendation as to how much insurance is enough coverage, because there can always be a claim made against you that exceeds your coverage. The amount of coverage you protect yourself with should be a given a great deal of thought and consideration, and you may want to discuss umbrella coverage with your insurance broker depending upon your financial situation.