Brown Law Firm FAQ Series
In the State of New Jersey, it is mandatory to carry insurance if you have a vehicle on the road. However, some individuals carry the minimum limits allowed under the law. Unfortunately, some of these underinsured drivers end up causing car accidents and hurting others. Some people believe that they can only recover up to the minimal policy limits of the underinsured driver, which is not always true. Let’s take a look at your car insurance policy and see if you are protecting yourself from underinsured drivers on the roadway.
How Can I Protect Myself from Underinsured Drivers?
Take a look at your car insurance policy and find the section for “Underinsured Motorists” or “UIM” coverage. This section is usually found along side the Uninsured Motorist coverage (UM coverage). This section can cover the gap, so to speak, between the minimal coverage limit of the person who caused the crash, and the actual settlement value of the injuries you suffered. You should see two numbers in that section, such as 250/500, 100/300, 50/100, 25/50, or 15/30.
The first number is the amount of UIM coverage offered, if you alone are injured. So if you have UIM policy limits of 250/500, you would have up to $250,000 available to compensate you for pain and suffering. The second number is the maximum amount that will be paid out per accident. So for example, if multiple people are injured, the most that will be paid out in total amongst the injured parties is $500,000.
How Does UIM Coverage Differ from UM Coverage?
The UM numbers come into play when a person is uninsured and caused an accident, or maybe someone caused an accident and sped off and no one knows who it was that caused the accident. If, for example, your UM section says 50/100, you would be able to recover up to $50,000 individually or $100,000 per accident, if multiple people are injured.
The big difference in how the policy limits work in UIM cases is the “credit” that is applied. For example, let’s say that the person who causes the accident has a 15/30 policy and you settle for the full $15,000. You then look to your UIM coverage for more because you were seriously injured. You would not have access to the full $50,000. You would have access to $50,000, minus the $15,000 you already received, albeit the “credit.” In this scenario, you would have access to an additional $35,000.
Knowing these tips, you can makes sure that you have good UM/UIM limits, as these limits dictate the maximum you will be able to recover if you are injured by an uninsured or underinsured driver.
I hope this short lesson was helpful. Check back with our page to see the discussion on Tort reform and how it has changed the recovery process for pain and suffering claims.