Posted by David Mann on 07/11/2019

When the Other Driver is Uninsured or Underinsured

Car accidents are common. If you are in an accident, usually you know that auto insurance coverage for you and the other driver will kick in and will help to cover medical treatment and damages to your vehicle. But in some accidents, the other driver may be uninsured or underinsured. Or, if you are in a hit-and-run crash, you may never be able to determine who the driver was.

Overview of Uninsured and Underinsured Driver Coverage 

If you are in a crash with a driver who has no car insurance, you usually need to use your own auto insurance policy to handle your damages. This assumes you are properly insured. Uninsured motorist coverage is usually optional coverage that you can buy from your auto insurance provider. UIM coverage will protect you when you are in a crash with a driver who lacks car insurance, and who is at fault for the crash.

UIM coverage is a requirement only in some states; in other states, insurance companies are required only to offer it. Uninsured motorist coverage normally cannot go over the amount of your regular liability coverage. So, if you have $75,000 in liability coverage for each accident, you usually cannot carry more than $75,000 in uninsured motorist coverage.

Although auto insurance is required for all registered vehicles in most states, there are still many drivers who do not have insurance. The best way to protect your interests is to have a decent amount of UIM coverage.

When a Driver is Uninsured

Another type of insurance you should opt to carry is underinsured motorist coverage. It will pay for damages that you have in an accident with a driver who has an auto insurance policy but does not have the coverage to pay for your level of injuries and damages. Your underinsured driver coverage will kick in and assist you to cover the difference between the limits of the other driver's policy and the total of your financial losses.

For example, suppose you have a car accident with $25,000 in medical costs and $10,000 in property damage. If the at-fault driver has liability insurance with a limit of $10,000, the driver who caused the accident is underinsured. In this situation, you have to make an underinsured claim on your own policy.

Unlike having a car crash with an uninsured motorist, it will take some time to figure out whether you have been in a crash with an underinsured driver. You may determine what the limits are of the at-fault driver’s coverage, but it still takes time to determine how much the claim will be and where it fits in the limits of the policy. It also takes some time to figure out the medical treatments required, how much work you will not be able to make, and so on. If the driver at fault has only minimum liability coverage, you will quickly know that you have to make an underinsured driver claim. But, if the driver who is at fault has $50,000 or $100,000 in liability coverage, it could take a few months to know whether you will need to make an underinsured claim.

As soon as you are sure the driver who is at fault is underinsured in any amount, you will want to make a claim fast. The majority of auto insurance companies will put a limit on the time that you have to make a claim for uninsured and underinsured driver claims, sometimes as few as 30 days after the crash.

Possibility of Bad Faith

If you do make an uninsured or underinsured driver claim, you should expect your auto insurance provider to look into your medical treatments, what your injuries are, etc. In some states, such investigations can turn into a bad faith claim against your auto insurance company. All insurance companies must handle their claims in good faith, but if the insurance company is too adversarial, it could have violated its duties.

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