Question: What is the difference between UM and UIM coverage on my automobile policy?
Answer: Everyone knows that the law requires that you purchase automobile liability insurance if you want to drive legally on public roadways. However, many people do not know exactly what they are buying when they write that check to the insurance company. The following is an explanation of UM and UIM coverages on your auto policy which are required by law:
UM (Uninsured Motorist) coverage protects you in the event that you are injured by a negligent uninsured motorist.
For example, if you are in a car accident with another driver who has no insurance and is at fault for the accident, your insurance company with pay you for damages due to bodily injury under the UM coverage of your policy. These damages include, but are not limited to, medical bills, wage loss, pain and suffering.
The amount that the insurance company will pay is limited by the amount of coverage purchased. The minimum amount of coverage required by law is $25,000 per person, per occurrence and $50,000 aggregate per occurrence. This means that the maximum UM benefit for any one person is $25,000 per occurrence. The $50,000 limit represents the maximum UM benefit for damages for all persons due to bodily injury for any one occurrence. Higher limits may be purchased to protect yourself from damages caused by an uninsured motorist.
UM coverage applies to liability for injuries only, not property damage. If you want to protect your vehicle from damages from an uninsured motorist, you must purchase a separate coverage.
UIM (Under Insured Motorist) coverage protects you in the event that you are injured by a negligent party who does not have sufficient liability insurance to fully indemnify you for damages due to bodily injury. These damages include, but are not limited to, medical bills, wage loss, pain and suffering.
For example, if you are injured in a car accident and have damages totaling $30,000 and the negligent party has a liability limit of $25,000, the negligent party does not have sufficient coverage to fully indemnify you. Therefore, the negligent party is under insured, and your under insured motorist coverage will pay the rest of your claim up to the limit of the UIM coverage.
In order to qualify for Under Insured Motorist benefits under your own policy, your UIM limits must be higher than the liability limits of the negligent party. In the same example as above, if you carried 25/50 UIM coverage and the negligent party carried 25/50 liability coverage, you would not qualify for Under Insured Motorist benefits. However, if you carried 50/100 UIM limits, you would qualify for UIM benefits.
The amount of UIM benefits available is derived from the difference between your UIM limits and the negligent party’s liability limits. In the above example in which you carried UIM limits of 50/100 and the negligent party carried liability limits of 25/50, you would qualify for up to $25,000 of additional benefit under the UIM coverage of your policy.
Given the high costs of medical care these days, it is a good idea to carry high UM and UIM limits to protect yourself in the event you are in an accident with an uninsured or under insured motorist.
As Gresham and Oregon City personal injury lawyers, we have vast experience helping our clients pursue UM and UIM claims. If you are injured in an automobile accident, call James F. O’Rourke Jr. & Associates.