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What is Uninsured (UM) and Underinsured (UIM) Motorist Coverage?

February 27, 2017 by The Parrish Law Firm

uninsured motoristNot all drivers carry insurance coverage. In fact, in Virginia, drivers can even opt out of having coverage if they pay a $500 annual fee, according to the Virginia Department of Motor Vehicles. Although many people do pay this fee and officially register as an uninsured driver with the DMV each year, many others simply let their insurance coverage lapse.

Unfortunately, uninsured motorists are more common on Virginia roads than many people realize. According to a study from the Insurance Information Institute (III), approximately 10 percent of Virginia drivers lack insurance coverage. This means that you likely pass dozens of uninsured motorists every single day.

In the event that one of these uninsured drivers causes an accident, they can be held personally liable for the crash. Unfortunately, in many situations, uninsured and underinsured drivers simply lack the assets to actually cover the injured party’s damages. This is where uninsured (UM) and underinsured (UIM) motorist coverage becomes a must-have for Virginia drivers. If your insurance claim has been denied or if you have any questions about uninsured motorist claims, you need to speak to an experienced auto insurance lawyer as soon as possible.

Uninsured Motorist Coverage is Critically Important

UM and UIM coverage will protect you and your family in the event that you are involved in a crash with an uninsured or underinsured driver. This coverage through your own insurance company will step in and pay for the damages that the negligent driver is unable to cover.

An Example of How UM Coverage Works in Virginia

Imagine that you were driving through an intersection in Manassas when suddenly the side of your car was hit by a driver who plowed through a red light. Assume that you were injured in the crash and your personal injury claim is worth $60,000.

In this case, there is no doubt that this other driver is completely at fault for the accident. However, the negligent driver carries the minimum mandated insurance coverage. This type of policy only provides $25,000 of bodily injury coverage for your accident. Unfortunately, this leaves you with a $35,000 coverage gap.

In this situation, a UM/UIM policy would prove to be extremely important. For instance, if you had uninsured motorist coverage with a policy limit of $100,000, you could pursue the $25,000 from the negligent driver’s insurance policy and the remaining $35,000 from your UIM coverage.

Do You Know Exactly What Your Insurance Policy Covers?

If you have auto insurance in Virginia, you will have some level of uninsured motorist coverage. Virginia state law mandates that all auto insurance policies offered within the state carry the following minimum levels UM/UIM coverage:

  • At least $25,000 per person and $50,000 per accident of bodily injury coverage
  • At least $20,000 per accident of property damage coverage

Of course, these are only the minimum levels of coverage. It is a best practice to carry a greater amount of UM and UIM insurance coverage. In fact, it is recommended that you have uninsured motorist coverage that is equal to your general policy limit, as this will ensure that you and your family are best protected in case of a major accident.

Ultimately, it is imperative that you understand exactly what type of coverage you have. Please be sure to review your insurance policy in detail.

Uninsured Motorist Coverage and Subrogation

Car accident injury claims are often extremely complex. This is true for several reasons, not the least of which is sorting out the liability and insurance issues. Additionally, uninsured and underinsured motorist claims tend to be among the most complex cases.

These cases can even lead to multi-year disputes. As an example, consider a Virginia uninsured motorist coverage case that was decided in 2012. One of the reasons that these cases are so complex is because of a concept known as “subrogation.” In the simplest terms, subrogation is an equitable remedy that allows an insurance company to recoup money from another party that was deemed at fault for an accident.

A Simple Example of Subrogation

Assume that you were involved in an accident and your car sustained about $5,000 in damages. Another driver was entirely to blame for the crash and therefore is liable for the accident. However, as you need your car fixed quickly, your own insurance company may pay for you to have your car repaired immediately in exchange for you paying the policy’s $1,000 deductible. Then, your insurance company would seek compensation from the at-fault driver or his or her insurer.

Once your insurance company successfully recovers the full $5,000 from the at-fault driver, it would then return to you the $1,000 you paid toward the deductible and keep the other $4,000.

Virginia Has Changed the Law Regarding Subrogation in UM and UIM Cases

For many years, issues pertaining to subrogation proved to be a complicating factor in many uninsured and underinsured motorist claims. However, as of January 1, 2016, all newly issued Virginia auto insurance policies now contain provisions that will help to foster earlier settlement in UIM cases. Two key changes are:

  • An insurance carrier’s subrogation rights are eliminated in cases where the defendant fully cooperates.
  • The injured party can sign a release with the opposing insurance company without damaging their own UM/UIM claim.

Contact Our Office Today

At Parrish Law Firm, PLLC, our car accident lawyer has extensive experience handling uninsured motorist claims. To learn more about what we can do for you, please do not hesitate to contact our Manassas office today to set up a free review of your claim.

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