As personal injury lawyers we regularly handle claims of those injured in car accidents. In 99% of those cases the money that pays for their injuries comes from either the tort-feasor’s (wrong-doer) insurance or in some cases their own. For these reasons the type of coverage a person has is incredibly important when any type of car, truck, or motorcycle accident results in injury or death. Today, the coverages that will be discussed are underinsured motorist coverage and uninsured motorist coverage, both of which are statutorily regulated in Indiana.
What Are Uninsured and Underinsured Motorist Coverage?
Uninsured Motorist Coverage is exactly what it sounds like, coverage provided by your insurance policy that will pay for your injuries in the case that you are hit by another driver who does not have auto insurance as is explained in Ind. Code § 27-7-5-4(a). Indiana law under Ind. Code § 27-7-5-2(a)(2) provides that Insurance providers must offer this type of coverage in limits at least equal to your own liability limits, which in Indiana may be as low as $25,000. So, to sum up Uninsured Motorist Coverage it is coverage that must, under Indiana Law, be provided by your insurance provider with limits equal to or higher than your own liability limits, which protects you in case you are injured in an accident caused by an uninsured driver.
Underinsured Motorist Coverage is slightly more complicated, but also regulated by the Indiana Code. Ind. Code § 27-7-5-2(a) provides that Underinsured Motorist Coverage must be provided with limits of at least $50,000 regardless of what your own liability coverage is. This coverage is meant to protect you, according to Ind. Code § 27-7-5-4(b), from “an insured motor vehicle (other person) where the limits of coverage available for the payment to the insured (you) under all bodily injury liability policies covering person liable to the insured are less that the limits for the insured’s underinsured motorist coverage at the time of the accident.” What this means is that if you are hit by another driver, who has liability coverage limits that are less than your “underinsured motorist coverage” you will be able to recover from the tort-feasor up to his/her liability limits and then recover from your own “underinsured motorist coverage” for any additional injuries. For instance, if you were hit by a driver who has liability insurance for $25,000 and you have “underinsured motorist coverage” for $50,000 you would be able to recover a maximum of $25,000 from the tort-feasor and then recover from your own policy if you have injuries that require more than $25,000.
Why Do You Need Uninsured And Underinsured Motorist Coverage?
As explained above, these types of coverage come in handy when you are injured by someone who is either uninsured or has less insurance coverage than you do. But we hear the “that won’t happened to me” and “but I saved a bunch by waiving it” arguments all the time. Well, this is our best shot at explaining why waiving either is not a good idea in any circumstance.
- Both Uninsured and Underinsured Motorist Coverages are relatively cheap. Paul Sullivan, in an article for the New York Times wrote that Uninsured Motorist coverage costs “a couple of hundred dollars a year for each $1,000,000 in coverage. So if you were to get $100,000 in Uninsured motorist coverage, it would cost you roughly $20 per year, or $1.66 each month. Multiply that by 2 so that you have both uninsured and underinsured coverage, and you spend a whopping $3.33 per month to protect yourself from uninsured and underinsured drivers.
- 14% of the driving population is Uninsured, meaning there is a 1/8 chance that if you are in an accident the person who hit you doesn’t have insurance. And if you don’t have uninsured motorist coverage, you’ll be paying for your medical bills out of pocket. Even more drivers have minimum policies that only provide $25,000 in coverage, which anyone who has paid serious medical bills knows doesn’t go very far. If your exceed that and you don’t have underinsured motorist coverage, you will be paying your bills out of pocket.
Please do not waive your uninsured and underinsured motorist coverages. Not only will they help protect you in case you are injured by an uninsured or underinsured motorist, they are also incredibly cheap. It is also important to note that “full-coverage” is only for property damages, not bodily injury, so don’t think that since you have “full-coverage” that uninsured/underinsured motorist coverage is unnecessary.