Underinsured Motorist Coverage

The One Automobile Insurance Coverage Everyone Should Have, But Few Do
Underinsured Motorist Coverage Paperwork

Underinsured Motorist Coverage

It is a situation I see far too often and one that is entirely preventable. A client comes into my office having been seriously injured in an automobile accident through no fault of his or her own. Medical bills are already into the tens of thousands of dollars and future surgery may be needed to treat the injuries sustained. We send out our letter of representation to the at-fault driver’s insurance company and soon learn that the at-fault driver only purchased the minimum liability insurance required by state law – currently $25,000 in both Ohio and West Virginia.

Unfortunately, our client, not understanding the importance of underinsured motorist coverage did not purchase this optional coverage in order to avoid paying an “extra” premium, a premium that is usually only a fraction of the cost of collision or liability insurance. As a result, the $25,000 of liability insurance coverage is the total amount available to compensate our client for damages sustained in the crash despite the fact that the actual damages sustained far exceed $25,000. While the at-fault driver would theoretically be personally responsible for the excess damages, experience has proven that people who carry the minimum mandatory limits of liability coverage usually don’t have personal assets available to pay for damages which exceed the available liability insurance coverage.

Underinsured Motorist Coverage Money

Underinsured motorist (UIM) is optional automobile insurance which protects you, immediate family members living in your household and your passengers when an at-fault driver’s liability insurance coverage is insufficient to compensate you (or your family member or passenger) for injuries and damages sustained in an automobile collision. That is, if damages arising from injuries exceed the amount of available liability insurance, underinsured motorist coverage kicks in to help provide compensation for the excess damages up to the limits of the underinsured motorist coverage that you purchased. How underinsured motorist coverage works in reality varies by state, with significant differences between underinsured motorist coverage in West Virginia versus Ohio.

West Virginia Underinsured Motorist Coverage

In West Virginia, insurers are statutorily required to offer insureds an option to purchase underinsured in an amount equal to the amount of uninsured motorist coverage included in the policy up to an amount equal to the amount of liability insurance purchased. Uninsured motorist coverage is similar to underinsured motorist coverage but protects you in the event the at-fault driver has no liability insurance. West Virginia law mandates that all automobile insurance policies include a minimum of $25,000 in uninsured motorist coverage, with the option to purchase higher limits, including up to the limits of liability coverage purchased. West Virginia insurers are required to make a written offer of underinsured motorist coverage, including a disclosure of the premium to be charged for each amount of coverage offered, and maintain a written record of both the underinsured motorist coverage option selected or rejected and the uninsured motorist coverage option selected. When underinsured motorist coverage is purchased, West Virginia treats it as pure excess coverage – that is, it will pay for all damages which exceed the amount of liability coverage up to the limits of the underinsured motorist coverage available under the policy.

Ohio Underinsured Motorist Coverage

By contrast, underinsured motorist coverage in Ohio is not treated as pure excess coverage. Instead, Ohio reduces the amount of recoverable underinsured motorist coverage dollar for dollar by the limits of available liability coverage. Thus, unless the limits of underinsured motorist coverage exceed the limits of available liability coverage, the insured cannot recover underinsured motorist coverage benefits even if damages exceed the amount of available liability coverage. Ordinarily, the maximum you can receive is the limit of underinsured motorist coverage unless the terms of your policy provide otherwise. Also unlike West Virginia, Ohio does not provide for mandatory uninsured motorist coverage or a mandatory offer of underinsured motorist coverage.

Real Life Examples of UIM

A few real world examples may help illustrate the importance of underinsured motorist coverage and the distinctions between its application in West Virginia and Ohio:

Scenario #1:

Accident happens in either Wheeling, West Virginia or St. Clairsville, Ohio. The at-fault driver has $25,000 in available liability insurance limits. The injured party has $60,000 in damages arising from injuries sustained in the accident and no underinsured motorist coverage. The injured party is able to recover the $25,000 in liability coverage and receives no compensation for the remaining $35,000 in damages sustained.

Scenario #2:

Accident happens in Moundsville, West Virginia. The at-fault driver has $25,000 in available liability insurance limits. The injured party has $60,000 in damages arising from injuries sustained in the accident and underinsured motorist coverage in the amount of $25,000. The injured party is able to recover the $25,000 in liability coverage, $25,000 in underinsured motorist coverage and receives no compensation for the remaining $10,000 in damages sustained.

Scenario #3:

Accident happens in Bellaire, Ohio. The at-fault driver has $25,000 in available liability insurance limits. The injured party has $60,000 in damages arising from injuries sustained in the accident and underinsured motorist coverage in the amount of $25,000. The injured party is able to recover the $25,000 in liability coverage and no underinsured motorist coverage benefits; thus, receiving no compensation for the remaining $35,000 in damages sustained because Ohio law reduces the amount of available underinsured motorist coverage dollar for dollar by the amount of available liability coverage.

Scenario #4:

Accident happens in Weirton, West Virginia. The at-fault driver has $25,000 in available liability insurance limits. The injured party has $60,000 in damages arising from injuries sustained in the accident and underinsured motorist coverage in the amount of $50,000. The injured party is able to recover the $25,000 in liability coverage and $35,000 in underinsured motorist coverage; thus, receiving full compensation for the injuries and damages arising from the accident.

Scenario #5:

Accident happens in Toronto, Ohio. The at-fault driver has $25,000 in available liability insurance limits. The injured party has $60,000 in damages arising from injuries sustained in the accident and underinsured motorist coverage in the amount of $50,000. The injured party is able to recover the $25,000 in liability coverage, $25,000 in underinsured motorist coverage and receives no compensation for the remaining $10,000 in damages sustained because Ohio law reduces the amount of available underinsured motorist coverage dollar for dollar by the amount of available liability coverage.

Scenario #6:

Accident happens in New Martinsville, West Virginia. The at-fault driver has $25,000 in available liability insurance limits. The injured party has $125,000 in damages arising from injuries sustained in the accident and underinsured motorist coverage in the amount of $100,000. The injured party is able to recover the $25,000 in liability coverage and $100,000 in underinsured motorist coverage; thus, receiving full compensation for the injuries and damages arising from the accident.

Scenario #7:

Accident happens in Cambridge, Ohio. The at-fault driver has $25,000 in available liability insurance limits. The injured party has $100,000 in damages arising from injuries sustained in the accident and underinsured motorist coverage in the amount of $100,000. The injured party is able to recover the $25,000 in liability coverage and $75,000 in underinsured motorist coverage; thus, receiving full compensation for the injuries and damages arising from the accident.

As the above illustrations demonstrate, the more underinsured (or uninsured) motorist coverage that you purchase, the better protected you and your family are in the event you are injured as the result of the negligence of an underinsured (or uninsured) driver. Don’t wait until after you are in a car crash to make sure you have purchased adequate underinsured motorist coverage because it will be too late. Coverage must be in effect on the date of the accident to be available to compensate you for injuries and damages sustained in the car crash. If you can afford it, underinsured motorist coverage limits of at least $100,000 are reasonable in light of the increasing costs of medical treatment and care.

If you have been in an automobile accident, the attorneys at Gold, Khourey & Turak can help you determine all the insurance coverage available to compensate you for injuries and damages sustained. Additionally, if your damages exceed the amount of available insurance coverage and your automobile insurance policy was issued in West Virginia, our attorneys can help determine whether your insurer made an effective offer of the optional coverages or whether you may be entitled to additional coverage under applicable law. We offer a free consultation on all personal injury, wrongful death and automobile accident cases, and there’s never a fee until we collect money for you. Contact us today at (304) 845-9750.

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