Uninsured and Underinsured Motorist Insurance: Settlements and Claims

This page will explain how underinsurance and uninsured motorist insurance (UIM) work and how you can access it to get compensation for an accident claim. We will also look at examples of recent settlements and verdicts in actual auto accident cases involving UIM claims.

What is Uninsured Motorist Coverage?

Uninsured and underinsured motorist coverage (UIM) is the part of your auto insurance policy that is supposed to pay for losses or damages caused by another driver when that at-fault driver either: (a) has no insurance, or (b) does not have enough insurance to cover all of your damages. The best way to help you understand how UIM coverage works is with hypothetical examples.

Let’s say Amy is stopped at a red light when she gets violently rear-ended by Bob. Bob is clearly at-fault for the accident because he struck Amy from behind at a red light. That means that Bob (or his insurance) will be liable for all damages Amy incurs as a result of the accident, including property damage, medical bills, lost wages, and pain and suffering. Amy’s car is wrecked and she suffers a broken leg, and a herniated disc injury in the accident. With all the medical bills and lost wages included, Amy’s damages from the accident total $150,000.

Scenario 1 – Bob Has No Insurance:

Let’s assume that Bob does not have any auto insurance at all. Even though he is legally required to have insurance, Bob didn’t pay his premium, and his car insurance coverage was canceled 2 months before the accident with Amy. In this situation, Amy’s $150,000 in damages from the accident would be covered by the uninsured motorist section of her own car insurance policy with State Farm. Instead of going after Bob and his insurance (which he doesn’t have), Amy would make a claim for the $150,000 under the UIM coverage of her own auto policy with State Farm.  Amy’s UIM coverage has a limit of $200,000, which means State Farm would theoretically be liable for all $150,000 in damages

Scenario 2 – Bob Does Not Have Enough Insurance

In scenario 2, let’s assume that Bob does have car insurance through GEICO. However, Bob got the cheapest policy he could that only has the bare minimum liability coverage required by his state. As a result, Bob’s auto insurance with GEICO has a policy limit of $100,000. In this situation, Amy would first go after Bob and GEICO for her damages. The maximum amount she will be able to get, however, is $100,000 because that is Bob’s GEICO policy limit. That leaves Amy with $50,000 in damages that were not covered. In this situation, Bob is “underinsured” so Amy can recover her remaining $50,000 in damages from her own insurance company, State Farm, under her UIM coverage.

Scenario 3 – Hit and Run

In this scenario, Amy gets hit from behind by another vehicle. However, the driver of that vehicle speeds away so Amy never gets his or her name and insurance information. Assuming the hit-and-run driver is never located, Amy would be entitled to collect her $150,000 in damages from her own insurance company under the UIM section of the policy.

Average UIM Settlement Amount

The average settlement payout in a UIM claim is less than $20,000. The primary reason for this is that most UIM claims involve underinsured drivers (as described in scenario 2 above). In those cases, the claimant has usually already recovered most of their damages from the at-fault driver and is only getting additional or excess damages under their UIM coverage. These types of UIM claims are more common and they push down the average.

Even though most UIM claims are relatively small, there are many UIM claims that can involve very big settlements. The big UIM cases generally involve catastrophic injuries in which the plaintiffs have extensive damages that greatly exceed the policy limits of the at-fault driver.

How Long Does it Take to Settle UIM Claims?

UIM claims take about the same amount of time to settle as regular auto accident claims against the at-fault driver’s insurance. Claims involving at-fault drivers with no insurance at all (uninsured drivers) tend to be fastest because there is no other party or insurance company to deal with. The claimant can just submit the claim directly to their own insurance company.

Cases involving underinsured drivers will usually take longer to settle, however, because the primary claim against the at-fault driver needs to be resolved first before the UIM claim can be finalized.

Finding Out About the At-Fault Driver’s Insurance

To determine if you might have a UIM claim, you will first need to identify whether the at-fault driver has insurance and, if so, what the limits of that insurance coverage are. Finding out if the at-fault driver is insured usually happens right away at the accident scene. Most states actually have laws that require drivers to stop and exchange insurance information in the event of an accident.

If the at-fault driver does have insurance, you still may have a UIM claim depending on what the limits of their insurance is and how extensive your damages are. If the at-fault driver has a small limit on their coverage and you suffered significant injuries, your damages are likely going to exceed the limits of that coverage.

So how do you find out what the policy limits of the at-fault driver’s insurance are? You just need to ask the insurance company. After you submit or report your accident claim to the other driver’s insurance company, you can simply write a letter to the insurance company requesting information on the available policy limits.

Uninsured Motorist Claims – Settlements and Verdicts

$50,000 Settlement (New Jersey 2023): The plaintiff, a minor, reportedly was operating a scooter at an intersection, when he was struck by a northbound vehicle owned and driven by the defendant. Defendant had no car insurance at the time of the accident, so the plaintiff sought coverage under the UIM section of his father’s auto insurance policy with GEICO. GEICO agreed to settle the claim.

$70,000 Settlement (Pennsylvania 2023): The plaintiff was riding a bicycle in a crosswalk at an intersection when a motor vehicle operated by allegedly made a left turn, struck the plaintiff’s bicycle and left the scene of the accident. Since this was a hit-and-run, the plaintiff had to make a claim for UIM benefits under his own auto insurance policy. The insurance company eventually agreed to settle the claim.

$388,155 Verdict (Florida 2023): The plaintiff suffered extensive injuries, some of which were permanent, in an auto accident that was caused by an uninsured motorist. The plaintiff was not able to go after the at-fault driver, so he brought a claim for UIM coverage against his own insurance company, Progressive. Progressive disputed the extent of damages and took the case to trial.

$85,000 Verdict (Alabama 2023): The plaintiffs, husband and wife, were injured in an auto accident that was caused by a driver with no insurance. They sought damages from their own insurance company, State Farm, under the UIM section of their policy. State Farm denied their claim and the case went to trial.

$20,000 Verdict (Oklahoma 2023): The plaintiff was a passenger in a vehicle owned and operated by his former wife when their vehicle was rear-ended by an uninsured non-party motorist. The plaintiff sought $98,500 in damages from his UIM insurance company, claiming he suffered neck injuries in the accident. The insurance company denied the claim and went to trial.

$600,000 Verdict (New Jersey 2023): The plaintiff, 42-year-old male, said the vehicle he was driving was lawfully stopped for traffic ahead of him when he was rear-ended by a vehicle operated by an uninsured motorist. He alleged various injuries and sought UIM coverage from his own insurance company, Allstate. Allstate refused to accept the claim and he sued them.

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