A recent Colorado Courtroom of Appeals conclusion dealing with uninsured/underinsured motorist (UI/UMI) insurance, despite the fact that extremely technical, reminded me of the value of this protection.
UI/UMI insurance policies will come to your rescue when you’re injured in an automobile incident you have a valid declare towards the other driver for your accidents simply because the other driver was at fault and the other driver possibly has no liability insurance coverage or has liability insurance policy with protection restrictions much less than the total of your claim. In that circumstance, your coverage business, up to the limitations of your UI/UMI protection, pays the quantity you would have been in a position to acquire from the at-fault driver if that man or woman experienced sufficient insurance.
By way of instance, assume you are sitting down at a purple gentle in your 2,500-pound Fiat 500 and you are rear-finished by a 6,000 pound SUV whose driver was both texting on a cellphone or scrolling as a result of the 200+ radio stations on the SUV’s satellite radio process. You are critically hurt in this accident and are still left with big health-related charges, missing income and extreme ache, amounting to a $300,000 declare versus the driver of the SUV. That driver, however, has only the minimum amount liability insurance policies needed by Colorado regulation — $25,000 — applicable to this accident.
In that circumstance, you can appear to the UI/UMI coverage provided by your have insurance coverage corporation, up to your policy restrict for this protection, to make up the distinction. So, if your UI/UMI coverage restrict is $275,000 or more, your insurance policies business will kick in $275,000 and your assert will be completely paid out ($25,000 from the at-fault driver’s insurance plan and $275,000 from your personal UI/UMI protection). If your UI/UMI protection limit is $200,000, your insurance enterprise will pay out $200,000 and your declare will remain unresolved to the tune of $75,000. (Legitimate, you can sue the at-fault driver for the $75,000 shortfall and consider to accumulate what you are owed from that driver’s other property, but excellent luck with that.)
To incorporate some background, when Colorado had no-fault auto insurance policies, UI/UMI insurance coverage was to some degree fewer vital due to the fact your plan delivered protection for your health-related expenditures and lost wages, up to your policy’s restrictions, irrespective of fault. Now, beneath Colorado’s fault legal responsibility method, if the other driver is at fault, these prices are that driver’s difficulty. Nonetheless, if the at-fault driver has no, or inadequate, liability insurance plan, these bills, as a realistic make any difference, turn out to be your issue.
Colorado law necessitates coverage companies to offer you with UI/UMI coverage in the total of $25,000 for each particular person/$50,000 for every incident when initially issuing you a policy (even though, if you are delusional, you can opt out of this coverage).
Your insurance plan firm will have to also supply you UI/UMI protection with restrictions up to the limits you have for your have liability insurance policy. As a result, if you have, say, $300,000 in coverage for your personal legal responsibility, you can also elect to have $300,000 of UI/UMI protection.
When you acquire an car policy, your coverage enterprise must give you a disclosure statement detailing this right. However, this disclosure statement is a one-time party. Until you afterwards enhance your liability coverage, you are not entitled to a different disclosure statement and whatever stage of UI/UMI coverage you experienced earlier will have forward with the renewal.
In my opinion (and as quite a few men and women have discovered the difficult way), UI/UMI coverage is pretty critical and you need to indication up for the maximum limit obtainable to you.
There are numerous drivers out there sharing the highway with you who have only the bare minimum required liability insurance policy — or no liability insurance at all. The value of UI/UMI insurance policy is modest and value each individual penny.
Jim Flynn is with the Colorado Springs organization of Flynn & Wright LLC. You can call him at [email protected]