Unfortunately there are plenty of drivers out there who hit the highways without any liability insurance (or insufficient coverage). Should you have a car crash with an underinsured or uninsured driver who was at fault, you can still receive compensation from your own insurance policy. The claim against your insurer will be processed under the terms of the UM/UIM portion of your policy. UM/UIM stands for uninsured motorist and underinsured motorist.
This can be a complicated section of the policy. In essence, your own insurance takes the place of the insurance coverage that the other driver should have had and handles your claim almost as a routine liability claim by another insurance company. There are many additional definitions used for this coverage only. Please read them and the explanations provided below them carefully before delving into your policy’s agreement, exclusions and other provisions. In our sample fault-based policy, this is listed as Coverage D1– Uninsured Motorists Bodily Injury Coverage. Car damage coverage is discussed at Coverage D2-Uninsured Motorists Car Damage Coverage.
Additional Definitions Used in Coverage D1 (Bodily Injury) Only
As used in coverage D1:
(1) Insured person means:
(a) you or a relative;
(b) any other persons occupying your auto;
(c) any person for damages that person is entitled to recover because of bodily injury to you, a relative, or another occupant of your auto.
However, no person shall be considered an insured person if the person uses a vehicle without permission of the owner.
(2) Your auto means:
(a) your insured car;
(b) any motor vehicle not owned by you or a resident of the same household while it substitutes temporarily for your insured car;
(c) any motor vehicle not owned by you or a resident of the same household while being operated by you.
The term your auto includes a utility trailer while being used with a motor vehicle defined in (a), (b) or (c) above, but does not include:
(i) any automobile or utility trailer owned by a resident of your household;
(ii) any automobile when used to carry persons or property for a charge; (This does not include shared-expense car pools.)
(iii) any automobile while being used without the permission of the owner.
(3) Motor vehicle means a land motor vehicle or trailer but does not mean a vehicle:
(a) Operated on rails or crawler-treads;
(b) Which is a farm-type tractor, or equipment designed or modified for use principally off public roads, while not on public roads;
(c) Located for use as a residence or premises.
(4) Uninsured motor vehicle means a motor vehicle which is:
(a) not insured by a bodily injury liability bond or policy at the time of the accident;
(b) insured by a liability bond or policy at the time of the accident which provides bodily injury liability limits less than the minimum bodily injury liability limits required by the financial responsibility law of the state in which your insured car is principally garaged;
(c) a hit-and-run vehicle which strikes:
(i) you or a relative;
(ii) a vehicle which you or a relative is occupying;
(iii) your auto
(d) insured by a bodily injury liability bond or policy at the time of the accident but the company denies coverage or becomes insolvent within one year of the accident;
(e) an underinsured motor vehicle.
Uninsured motor vehicle, however, does not mean a vehicle:
(a) owned by or furnished or available for the regular use of you or a relative;
(b) owned or operated by a self-insurer as contemplated by any financial responsibility law, motor carrier law or similar law;
(c) owned by a governmental unit or agency;
(d) operated on trails or crawler-treads or while located for use as a residence and not as a vehicle;
(e) which is a farm-type tractor or any equipment designed for use principally off public roads, except while actually upon public roads.
(5) Hit-and-run vehicle means a motor vehicle, which causes bodily injury to an insured person arising out of physical contact of such motor vehicle, which the insured person is occupying at the time of the accident, provided:
(a) The identity of the owner or operator of such hit-and-run vehicle cannot be ascertained;
(b) A report has been made to the proper police authorities within 24 hours of the accident by or on behalf of the insured person;
(6) Insured motor vehicle, for purposes of bodily injury caused by an underinsured motor vehicle means a motor vehicle that is insured under a motor vehicle liability policy, or automobile liability insurance policy, is self-insured, or for which a cash deposit or bond has been posted to satisfy a financial responsibility law.
(7) Underinsured motor vehicle means a motor vehicle that is an insured motor vehicle but insured for an amount that is less than the limits of liability for Uninsured Motorists Coverage shown in the Declarations.
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Let’s take a look at some of these definitions because some of them are certainly not consumer friendly. The ones loaded with industry-speak terminology are further explained below.
(1) Where it refers to an insured person, that’s pretty self-explanatory until you get to “c” where it says: “any person for damages that person is entitled to recover because of bodily injury to you, a relative, or another occupant of your auto.” What that means is that if there is a person who is entitled to collect damages as a result of the injury to you or a relative or a passenger in the car, that person is also considered an insured person for UM coverage.
Example: Suppose you are driving and your friend is a passenger. You are hit by an uninsured motorist who ran a stop sign. Your friend is injured and is entitled to damages. If his wife, who is not in the car, files a claim for loss of consortium (loss of sexual relations, services, etc.) because of his injuries, she is also considered an insured person for the purposes of UM.
(4) This part tells you what an uninsured motor vehicle is for the purposes of UM coverage, and then it tells you what it isn’t.
---Here’s what an uninsured motor vehicle is: It’s a vehicle without any insurance at the time of the accident or with insufficient insurance. (Having no insurance could mean either it never had any, or it had insurance and the insurer went belly up within a year of the date of the accident.) It also could be a hit and run vehicle which strikes an insured, hits a vehicle an insured is in, or hits an insured’s vehicle. (In our sample fault-based policy, a hit and run driver is one whose identity can’t be determined, as long as a police report is filed about the accident within 24 hours. This provision may differ from state to state, so check your own policy’s definitions under UM/UIM.)
--Here is what it isn’t: It isn’t
(1) your car or another insured’s car or one you regularly use
(2) a car that is self-insured by its owner;
(3) a government vehicle;
(4) used on trails (i.e., railroad cars) or crawler-treads (i.e., bulldozers);
(5) used as a residence (i.e., trailers at a campsite); or
(6) a tractor used for farming or another type of off-road vehicle (unless it is being used on-road at the time of the accident). |
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