What happens if someone else’s negligence behind the wheel causes you injury and they don’t have enough insurance?sIn Maine, every auto insurance policy is required to have several components. In a previous post, we discussed uninsured motorist (UM) coverage, or the coverage that exists when the other party is not insured. The partner component of UM coverage is underinsured motorist (UIM) coverage. Like with UM coverage, every auto insurance policy in Maine must have a minimum of $50,000 per person and $100,000 per accident of UIM coverage (See Maine Revised Statutes Annotated Chapter 29-A Section 1605 (1)(C)(2) & (3) and Maine Revised Statutes Annotated Chapter 24-A Section 2902). This means, if you have insurance, you automatically have this coverage as part of your policy.
UIM coverage is used when someone causes you injury and their insurance policy is not sufficient to cover your damages. For example, although Maine requires $50,000 minimum of insurance, Massachusetts only requires $20,000 minimum. With the rising costs of medical expenses, even a moderate injury can easily use up this amount. This must also cover any lost wages, pain and suffering, attorney’s fees, and all other damages you may have. (The only exception is your vehicle damage, which is usually covered separately.)
So, if you are injured by someone who has $20,000 of insurance and you have $50,000, then there is a total of $70,000 of coverage right?sUnfortunately, no. In Maine, your UIM carrier receives a credit for the amount paid by the insurance company for the at fault driver. Therefore, in this example there is only a total of $50,000 of coverage. $20,000 paid by the at fault driver and $30,000 paid by your UIM carrier. Therefore, if you only have the minimum required insurance coverage of $50,000 of UIM, and someone else with the minimum causes you an injury, there is no additional coverage for your injuries.
Just like with UM coverage, that limit is further split, depending on how many people are injured in the accident. For example, if a family of three are traveling in the same car and all three are injured, the maximum amount available for the whole accident is capped at $100,000. No one person can recover more than $50,000 and the total amount the insurance company will have to pay will not exceed $100,000. Again, if all three have even moderate injuries, there will likely not be enough money to properly compensate everyone.
It is always a good idea to purchase as much insurance as you can afford. The minimum requirement of $50,000 may not be enough if you are seriously injured by an underinsured driver.
In cases with very high damages, there may be additional coverage if you are listed on more than one UIM insurance policy. This circumstance requires a complex analysis of the policies involved and presenting the claim properly to the insurance companies.
If you have been injured by an underinsured motorist and have questions about how to be compensated through your underinsured motorist coverage, contact us at 1-800-917-1784 or read more on our website, www.Peter-Thompson-Associates.com, on our car accident practice page.