Underinsured Coverage – Do you have it?

One of the most important coverages you should have on your auto insurance is Underinsured coverage. Most people, however, have no idea how Underinsured coverage works.  As an experienced personal injury attorney, I know how it works. Let me try to explain it.

You are in a car accident that was not your fault, you are severely injured and you were the operator of your own car. Initially you will need to find out what the bodily injury policy limits are for the car that caused the accident.  Pursuant to Massachusetts General Laws Chapter 175 section 112C your are entitled to know the limits. Assume you have $20,000.00 of Underinsured Coverage listed on your auto policy.

Let’s say you were hit by a teenager who was driving his/her first car and had the minimum bodily injury compulsory coverage just to get the car on the road. In Massachusetts, the minimum bodily injury coverage is $20,000 per person. Let’s assume the value of your case is well over $20,00.00. Now what?

Your options are limited. You can try to bring a civil action against the teenage driver and try to secure any personal assets he/she may have to satisfy the claim. (Good luck with this one-what “assets” does a teenager have?) (Also, the teenager is allowed to file for bankruptcy to wipe out a personal injury judgment obtained against him/her). Option two is to look for another deep pocket, a liquor liability claim, defective product…etc., which may or may not be available. In my opinion, the best option is to pursue an Underinsured claim against YOUR OWN auto insurance company.

If your claim is worth more than the teenagers’ bodily injury policy limits, you first demand that the policy limits of $20.000.00 be tendered. The bodily injury insurance company will require you to execute a release, releasing their insured (the teenager) from liability before they will send you a settlement check. BEFORE, you do this you MUST get the written permission of your insurance company because they may decide to go after the teenager themselves, or you will lose your right to pursue an underinsured claim.

Most people do not even know how to calculate whether they have Underinsured Coverage! Underinsured Coverage is on your auto insurance Coverage Selections Page under Part 12. How you calculate this is you subtract the bodily injury policy limits of the responsible party ($20,000.00 here) from your Underinsured limits ($20,000.00). The balance is the amount of money you have available to you to continue pursuit of your personal injury claim for compensation.

Have you figured out that here YOU HAVE ZERO UNDERINSURED COVERAGE? The Underinsured Policy limits MUST BE higher that the Bodily Injury Policy Limits of the responsible party.

In this scenario you do not have many options. You may get stuck with paying for medical bills out of pocket and out of your settlement. You may never be fully compensated for your claim. Make sure your Underinsured limits are higher than $20,000.00 per person.

Underinsured coverage also follows you around. It protects you while you are occupying someone else’s car that’s in an accident. It covers you if you are a pedestrian and are struck by a car. It covers the people that live in your household while they are occupying your car, a pedestrian or occupying an auto not owned by them. (As long as they do not have their own Massachusetts Auto policy)

Underinsured Coverage is relatively inexpensive as well ranging from $23.00-$40.00 on average a year for a $100,000.00 per person policy limit depending on your driving record and experience. In 21 years of practicing personal injury law, I have encountered some heartbreaking situations where sufficient Underinsured Coverage was not available. Call your insurance agent today and asked them one question: What is my Underinsured Coverage?

This is not meant as legal advice. To learn more about your rights with regard to a personal injury claim, please contact The Law Offices of Robert D. Ahearn.

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