Pennsylvania Car Accident Law: Uninsured and Underinsured Motorist Coverage: What You Don’t Know (and Buy) Could Hurt You
Among all the various types of insurance that people can buy: long-term disability, life insurance, homeowners insurance, etc. – Uninsured and underinsured motorist coverages are among the most important coverages people can get to protect themselves and their families. Uninsured motorist coverage (UM coverage) provides a source of benefits in the event an individual is injured by another driver who does not carry auto liability insurance. Underinsured motorist coverage provides a source of benefits in the event that a person is injured by another driver whose insurance coverage is insufficient to adequately compensate the person for their injuries and losses.
A simple hypothetical example illustrates the importance of these hedges. Imagine driving down the road carefully and within the posted speed limit. An oncoming driver crosses the center line and hits your vehicle head-on. He suffers serious bodily injury and misses a year of work. You are financially devastated by the accident and are facing a lifetime of pain and suffering and diminished function due to your injuries. Now suppose that the driver who caused all this does not have any type of car insurance. If you don’t have UM coverage on your own auto policy, you won’t get anything back and will have to face the financial consequences of this other driver’s irresponsible behavior with no legal recourse. Now suppose the other driver has insurance, but the policy is for the Pennsylvania legal minimum of $15,000. If you don’t have UIM coverage, you’ll be limited to $15,000 recovery, which won’t even begin to compensate you for what you’ve lost.
If you had purchased UM and/or UIM coverage on your own policy, you would have the right to make a claim against your own insurance policy to seek compensation for your injuries and financial losses, up to the limit of the amount of coverage you purchase. For example, if you purchased $500,000 of UM coverage and the other driver did not have insurance, you could recover up to $500,000 as a result of the accident. If the other driver was insured for only $15,000, you would have a potential fund of $500,000 on top of the other driver’s $15,000 in coverage, meaning you could potentially recover a total of $515,000.
Insurance agents and brokers don’t always explain the vital importance of UM and UIM insurance. When car insurance is purchased online, the information provided to the consumer is often even less complete. Uninformed insurance consumers are often victimized twice, once by the negligence of the uninsured or underinsured driver, and then again by the inadequate coverage provided in their own insurance policies.
Pennsylvania law places limits on the amount of UM/UIM coverage that can be purchased. Simply put, the amount of UM/UIM coverage cannot exceed the amount of liability coverage on the same policy. In other words, consumers are no more allowed to protect themselves than they are to protect others against their own negligence. However, “stacking” coverage is permitted. For example, if a person has three vehicles insured on the same policy, that person can purchase $500,000 of liability coverage and $500,000 of UM/UIM coverage. By choosing the “stacking” option, the consumer effectively multiplies the $500,000 in UM/UIM coverage by the number of vehicles on the policy, for a total of $1,500,000 in UM/UIM coverage. Carefully reviewing auto insurance coverages and paying a little extra for adequate UM/UIM coverage is one of the wisest things we can all do to protect ourselves and our families from the effects of negligent uninsured and insured drivers. insufficient.
By: Dan O’Brien
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