Uninsured or underinsured motorist coverage can be relevant to you in several different situations, including if you’re the victim of a hit and run accident.
Many people don’t fully understand uninsured and underinsured motorist coverage and how the claims process would work, so the following gives you a rundown of everything you should know.
Types of Coverage
There are four types of insurance coverage that you’ll hear referred to under the umbrella of uninsured motorist coverage.
There’s uninsured motorist bodily injury. This pays if an at-fault driver is the one who causes a car accident.
There’s uninsured motorist property damage. This will cover damage to your vehicle if someone without insurance hits it. In some states, you can use uninsured motorist property damage if you’re involved in a hit-and-run.
The third category is called underinsured motorist bodily injury. This type of coverage will pay when another driver causes an accident, but they don’t have adequate liability insurance to cover everything, including your medical bills and lost wages.
Finally, a fourth category is underinsured motorist property damage. This is to cover damage to your vehicle by someone without enough liability insurance.
If you’re ever in an accident and another driver is at fault, you may find yourself making a claim under your uninsured motorist or underinsured motorist components of your own car insurance. The two are different but related.
The overall purpose of uninsured coverage is to help you pay your property damage expenses and your medical bills if the at-fault party doesn’t have liability insurance.
If you were to get in an accident with someone who didn’t have liability insurance, while you could try and sue them if they were at fault, you wouldn’t have much luck in most cases. They wouldn’t have the assets typically to cover the costs regardless. The only time it would be worth it to file a personal injury lawsuit against someone with no insurance who caused your accident would be if you knew that person had assets, or somehow, you’d be able to make sure they could satisfy a judgment in your favor.
If you’re in an accident with someone and you know their identity, then the police will usually let you know if they don’t have insurance coverage.
What Is Underinsured Coverage?
We’ve touched a few times on what uninsured coverage is, and it is often lumped in with underinsured insurance, but there are differences.
Underinsured coverage is what would be effective if you were hit by someone who’s at fault in an accident but who doesn’t have high enough limits on their insurance policy to cover all your damages, including your medical expenses, potential lost income, pain and suffering, and any other losses you sustained as a result of the accident.
With both uninsured and underinsured coverage, it can’t go beyond the amount of your primary insurance coverage. For example, if you had $100,000 in liability coverage, which is what covers you if you’re at fault in an accident, then you can’t have more than that in uninsured or underinsured coverage.
How a Claim Works
If you believe that someone you were in an accident with is uninsured, or you were the victim of a hit-and-run, then you should give your insurer notice right away. Tell them you plan to file an uninsured claim.
There are often rigid deadlines to let your insurer know about uninsured claims, so you shouldn’t wait on this.
Underinsured claims are a bit different. In this case, you would probably need to wait a bit until you know more about what your medical treatment timeline could look like because you’ll need to estimate the value of your case.
However, if you’re working with a lawyer, and you believe that your case is possibly worth more than the value of the other driver’s liability coverage, then you would need to let your insurance company know that you’re likely to file an underinsured motorist claim.
Overall, the progress of these claims is similar to other types of auto insurance claims.
The most significant difference is that the claim is being filed with your own insurer.
Your insurance company will investigate, obtain your medical records, and conduct depositions if there are witnesses.
The other big difference aside from the fact that you file these types of claims with your insurance company is that if you can’t agree on a settlement, you’re prevented from filing a lawsuit against your insurance company.
Instead, what you would do if you can’t agree on a settlement is submit your claim to binding arbitration.
This is a less formal process than a trial. Arbitration is a hearing that takes place in front of a neutral party known as an arbitrator.
That person will hear the evidence from both sides and decide on who wins.
Some states but not that many overall, require you to have uninsured and underinsured coverage.
Even if you’re not required to, it’s something you should think about adding to your auto insurance.
If you have more than one car on your policy, you might be able to do what’s called stacking. That means you can stack your uninsured and underinsured coverage to multiply your limit by the number of vehicles. Some states don’t allow this.
Uninsured and underinsured coverage is usually inexpensive.
If you make an uninsured or underinsured motorist claim, your insurance company will do an investigation. Your insurance company has a duty to handle your claim in good faith. If your insurance company is going out of its way to work against you, it’s known as bad faith. In those cases, your insurance company may have breached its required duties.
If you’re unsure about anything and haven’t been in an accident, talk to your insurance company about your coverage and what you might want to add. If you’ve been in an accident and it was a hit and run, or the other driver had no insurance or not enough coverage, then you should talk to an attorney.