Uninsured/Underinsured Motorist Insurance – When Health Insurance Isn’t Enough!
By: Kathleen Murray, Capstone Client Advocate, June 17, 2015
There is no denying how important protecting your business is to your life and your livelihood. One of the necessary precautions to protect your business’ auto liability is having a solid commercial auto insurance policy that protects you, your company vehicles, and any of your employees that drive those vehicles.
Most cars in most states must have some form of auto insurance, which is required by state law. Most states consider mandatory liability auto insurance a good public policy. If you or your drivers cause a car accident, the person that was hit and damaged should be able to recoup their expenses from you. In some cases, the damages that are caused could end up costing a lot more than your liability insurance limits cover. The same scenario applies if you are hit by a driver who will, hopefully, have UM/UIM or sufficient UM/UIM coverage. However, in most cases, because of high insurance costs, motorists are not covered adequately. Hit and run driver incidents are annually increasing on the road.
Commercial underinsured motorist coverage will help protect your company if you or your employees get into an accident caused by a driver who does not have enough insurance coverage. If you are in an accident caused by such a driver, and you do not have UM/UIM coverage, your health insurance will generally pay for your medical bills related to the accident. Hospital costs, especially emergency room evaluation and the likelihood of ongoing therapeutic treatment, surgery or the necessity of transport by ambulance, will easily escalate into tens of thousands of dollars. If you have UM/UIM coverage, this will pay for your health care expenses before your health insurance kicks in.
UNINSURED and UNDERINSURED: What’s the Difference? There’s a slight, but important difference between uninsured and underinsured commercial auto insurance coverage.
Uninsured motorist coverage applies to all car accidents with drivers who do not have any type of car insurance. Underinsured driver coverage applies to all accidents with underinsured drivers – drivers who have auto insurance, but not enough to pay for the damages they caused in an accident. For either type of insurance to provide coverage, the other driver must be found liable for the accident.
How Commercial Underinsurance Motorist Coverage Works: It is important to understand that underinsured coverage is split into two categories: (a) Bodily Injury which covers medical-related expenses such as hospital bills, doctor’s visits, therapy, prescriptions and funerals. (b) Property damage which covers repair related or replacement costs to vehicles. Essentially, when you purchase underinsured motorist coverage limits, you are purchasing liability insurance for other drivers who do not have enough insurance to cover the costs for your injuries or property damage that resulted from an accident they cause. If you get into an accident caused by a driver who has liability limits that are lower than your underinsured limits, your auto insurance carrier will pay a claim for the difference between that driver’s liability and your underinsured limit.
The hard reality from UM/UIM claims is that your health insurance will not pay for lost wages if you miss work or for pain and suffering resulting from the accident. Lost wages and pain and suffering are paid by the at-fault driver’s liability insurance. If the other driver does not have liability insurance, or doesn’t have enough of it, you are out of luck – unless you have UM/UIM coverage or want to pursue the matter in court. Your only option is to pursue the matter in civil court or small claims court. As with any insurance loss, the carrier will want to investigate the claim. The carrier will confirm that the other driver is uninsured or underinsured or if he/she is at fault.
What to Do IF you are hit in An Accident: First and foremost, obtain the other driver’s insurance coverage, license plate number and driver’s license information. In Nevada, if there is bodily injury, the Police Department or Highway patrol will respond. A note of caution in a claim, the police report is not always the last word on who caused the accident, although it can sort out who was at fault. Claims are not always settled quickly. Injury claims take longer to settle as medical bills keep coming in. Notify the carrier immediately and your insurance agent.
Even if you live in a no-fault state, it is always important to review your coverage limits with your insurance agent. When UM/UIM is factored into your policy, the additional premium tends to be relatively inexpensive. The cost certainly outweighs the alternative of going without sufficient coverage. Of course, during the claims process, communicate with your adjuster and your agent closely.
