Many PA drivers do not know what type of auto insurance coverage they have. One of the most misunderstood types of coverage is underinsured motorist (UIM) coverage. We recently received this question about PA UIM claims:
Question: I was in a car accident and was seriously injured. I fractured my legs and arms and will need surgery. The accident was not my fault. I was told by my insurance company that the other driver only has $15,000 in liability coverage and that I can make a UIM claim under my own car insurance policy. What does that mean?
Before we can answer the question, we need to explain some terms.
First, the other driver's liability coverage protects that driver if he or she causes an accident and injures someone. Liability coverage financially compensates the individual (driver, passenger, pedestrian, etc.) that driver injures as a result of the accident he caused. It protects the at-fault driver because if he has to compensate the injured individual, the money comes from his insurance company and not from his personal assets.
Underinsured motorist coverage (UIM) is a type of coverage under an insured driver's own insurance policy. This coverage applies when a driver causes a car accident that results in injuries to another person, and the amount of the at-fault driver’s liability coverage is insufficient to provide full compensation to the injured individual.
In your case, you are only able to recover $15,000 from the other driver's liability coverage despite your serious injuries. The person who hit you does not have enough insurance to pay the full value of your claim for your injuries; therefore, they are underinsured.
Because you have UIM coverage, you can make a claim against your own auto insurer for your losses up to the full value of your claim, or up to the amount of UIM coverage you purchased.
For instance, if your injuries and damages are valued at $115,000, you would recover $15,000 from at-fault driver. If your UIM coverage is $100,000, then you would make a UIM claim with your auto insurance company to recover up the remaining $100,000. However, if your injuries are valued at $215,000, the maximum amount you can recover in a UIM claim is still $100,000 (the amount you purchased).
There are situations when you may be able to recover more if you have multiple auto insurance policies. You may be able to "stack" the UIM coverage from the policies to receive more. Therefore, it is important to talk to a PA car accident injury lawyer who knows PA insurance and auto accident law to determine what you may be able to receive.
Feel free to call our office. We ALWAYS offer FREE consultations. 877.944.8396
*Updated: February 11, 2015