Make Sure You Have Valid UM/UIM Waivers Before Foregoing A Claim
Recently clients of mine were in a car accident. The other vehicle was insured for minimal policy limits and did not provide more than $25,000 in coverage to pay for my clients’ injuries and damages. This amount was not sufficient to reimburse them.
When this happens, I look to my own clients’ auto insurance to see if they have underinsured motorist coverage. Underinsured motorist coverage (UIM) provides additional money through your own auto policy if another driver doesn’t have enough coverage to adequately cover your injuries or damages.
My clients’ insurance company claimed they had rejected UIM coverage. If that was true, then my clients were out of luck and could only recover the other driver’s minimal policy of $25,000. However, I asked my clients’ insurance company to provide the waivers my clients signed refusing UIM coverage so I could see if the waivers were valid under the law.
As it turns out, the waivers created by the insurance company were invalid. 75 Pa. C.S. § 1731 requires exact language that must be included on a waiver for it to be considered a valid waiver of underinsured motorist coverage. The insurance company did not use the exact language required. Case law in Pennsylvania has held that the addition or subtraction of even one word from the statutory language invalidates the waiver or may be used as evidence of bad faith in a denial of UIM benefits in such a situation.
Now, my clients’ insurance company has agreed to open a UIM claim for them even though the insurance company claimed my clients had waived such coverage. This is a perfect example of why having an attorney that is thorough, knowledgeable and aggressive is important when dealing with your own insurance company.
The Benefits of Underinsured and Underinsured Coverage Philadelphia
Many details make the difference in a personal injury or property damage claim. As we have seen, miswording the waiver invalidated one of my client’s insurance company’s denial of an underinsured motorist coverage claim. Many such instances exist, which is why consulting a lawyer is so important.
However, carrying underinsured and uninsured motorist coverage is always a good idea. In many cases, the insurance company has a valid waiver. With 7% of Pennsylvania drivers operating their vehicles uninsured and many more carrying minimum or grossly inadequate limits, all vehicle owners should consider these coverages necessary.
Auto insurance coverage minimums in Pennsylvania leave plenty of room for accident victims to lose out on compensation for property damage and personal injury. With the cost of vehicles and medical care rising, the problem only grows worse.
Currently, Pennsylvania’s minimum coverage requirements stand at the following:
- Bodily Injury Liability: $15,000 per person, $30,000 per accident
- Property Damage: $5,000
- Uninsured Motorist Coverage: $15,000 per person, $30,000 per accident
- Underinsured Motorist Coverage: $15,000 per person, $30,000 per accident
- First Party Benefits Medical Payments: $5,000
A serious personal injury can easily exceed the bodily limit liability amounts, and it only takes a minor accident to exceed the property damage minimum.
The benefits of taking underinsured and uninsured motorist protection include the following:
Protection Against Drivers With Few Assets
Many drivers have few or no assets and limited income. If you carry no uninsured and underinsured motorist protection, you may find yourself in a situation where you can collect nothing or only a small percentage of your damages from the individual.
Under the law, the driver at fault is responsible for paying the damages, whether $1,000 or $1 million. In practice, however, insurance companies bear responsibility because most individuals can only afford a small settlement.
Drivers with enough assets to cover a settlement of any size tend to carry high insurance limits. They have enough income to afford the higher premiums and a strong financial incentive to protect their wealth.
For example, a well-paid professional with $50,000 in the bank and $250,000 in home equity is likely to carry high policy limits. In addition to a standard policy, he or she may also have an umbrella policy, which provides additional coverage in increments of $1 million. The reality is that people who can afford to pay a settlement are generally well-insured.
However, many indigent and cash-strapped people have trouble affording their car insurance premiums. They may have to choose between paying for other necessities and car insurance. Since rent and food usually come first, they may let their policies lapse and hope they avoid accidents.
When an individual with few assets and income hits you, it is unlikely they can pay anything toward a settlement. Their assets are likely too low in value to sell for any significant sum, and wage garnishments may provide only a paltry amount. If the individual has Pennsylvania's minimum coverage, that may be the maximum you can collect. When dealing with an uninsured driver, you may never see a penny.
However, carry uninsured and underinsured motorist protection. Your insurance company will cover the difference between what you collect from the opposing insurance company and your actual damages up to your policy limits.
Ease and Convenience
Collecting from an uninsured or underinsured motorist can be expensive, time-consuming, and frustrating. In most cases, you must bring the defendant to court, prove your case, and take action to collect a judgment. Though courts may provide a judgment in your favor, they cannot change the fact that the defendant cannot pay. In the end, this may result in a valueless judgment.
By electing uninsured and underinsured motorist protection, you avoid this pitfall. Your insurer steps in to cover the difference, and you have no need to fight a potentially fruitless court battle.
Peace of Mind
After an accident, you have enough to worry about. Your vehicle may need repairs or to be replaced. Injuries may result in lost time at work. Medical bills pile up quickly, leaving you strapped.
Imagine adding the inability to collect your damages? Then you must face all this financial pressure alone because you have no uninsured or underinsured motorist protection.
If you opt for these crucial coverages, you never need to worry about being left in a financial lurch because you were hit by an uninsured or underinsured driver. Instead, your insurer will make good all your damages up to your policy limit. Regardless of whether your vehicle is struck by a well-insured wealthy person or an uninsured individual with no assets, you know your damages are covered.
Related Content: What Happens If I Am in An Accident with An Uninsured Driver?