Full Coverage Myth: Uninsured / Underinsured Motorist (UM/UIM) Coverage Explained

The “Full Coverage” Car Insurance Myth: Why You Need Uninsured / Underinsured Motorist (UM/UIM) Coverage

Many car insurance companies in Florida sell customers “full coverage” auto insurance. The phrase “full coverage” is misleading. Most times, “full coverage” doesn’t include uninsured/underinsured motorist (UM/UIM) coverage which is one of the most important coverages any car insurance customer should own. The phrase “full coverage” generally refers to the minimum coverages required by law in the State of Florida which typically does not include bodily injury coverage or UM/UIM coverage. Thus, “full coverage” simply means legal coverage but it certainly does not mean that you are covered if you are involved in an accident.

What coverages apply when you are in a car accident?

If you are involved in a car accident in Florida, and it was not your fault, there are two coverages you need to pay for medical expenses and compensate you for injuries, lost wages, and other damages that occur as a result. First, if you have purchased valid or legal car insurance, you will be guaranteed $10,000.00 in Personal Injury Protection (PIP) benefits. PIP will cover a majority of your medical expenses up to $10,000.00. However, if you went to the hospital and had several CT scans, the bulk of the benefits might be spent. If you purchased UM/UIM coverage, your only concern will be getting checked out for injuries and recovering physically and not about the cost of medical care.

What is Uninsured/Underinsured motorist (UM/UIM) coverage?

UM/UIM is an optional, add-on car insurance coverage that protects you when you are hurt by someone without enough insurance.

 Florida law does not require bodily injury insurance coverage. That means that many people are driving around the State with no insurance. For example, if you are rear-ended in traffic by someone who has “full coverage” auto insurance but does not have the optional bodily injury insurance coverage, the person that hit you will not have any insurance money to compensate you for your injuries. These people are called underinsured motorists or “UIM”. Moreover, there are many people in Florida who drive around without any insurance at all. These people are called uninsured motorists or “UM”.

When you purchase the optional UM/UIM coverage your own insurance company will be responsible for compensating you for your injuries If you are hit by someone that is either uninsured or underinsured. 

How does uninsured/underinsured motorist (UM/UIM) coverage work?

 It kicks in when someone else’s coverage drops out.  

 If you are in a car accident anywhere in Florida, there is a good chance that the person that hit you did not have bodily injury liability coverage. If you were injured in the accident and you have medical bills or lost wages or deserve compensation, your only option will be to sue the person that hit you.

 Recovering any money from an at-fault driver who did not carry insurance or who bought cut-rate insurance policy without bodily injury coverage is a long and difficult journey. It is best to hedge your bets by purchasing UM/UIM coverage. By purchasing UM/UIM coverage, you are protecting yourself in the event that you are hit by someone without good insurance. Typically, the extra monthly costs for UM/UIM coverage are minor and the benefits of having the coverage well outweigh the risks of driving in Florida without it.

How much uninsured/underinsured motorist (UM/UIM) coverage should you buy?

 As much as you can.

Most insurance companies will only sell you UM/UIM coverage in the same amount as your bodily injury insurance coverage. Remember that bodily injury insurance coverage is the amount of insurance money you are buying to protect your assets against someone who you hit and might sue you for their injuries. These coverages are usually sold in increments of $10,000/$20,000, $25,000/$50,000, $100,000/$300,000, $250,000/$500,000, and $1,000,000.

 For example, if you buy $10,000/$20,000 bodily injury coverage, your insurance company will pay someone up to $10,000 for their injuries in an accident you cause in order to make the person go away and agree not to sue you for your personal assets, retirement funds, or to garner your wages. The more bodily injury coverage you buy, the safer you are from being personally and financially responsible for accidents you cause. The more bodily injury coverage you buy, the more the insurance company will charge you each month.

 If you have $10,000/$20,000 bodily injury coverage, you are allowed to buy up to $10,000 in non-stacked UM/UIM benefits. You may be able to buy less than $10,000 in UM/UIM coverage if it’s offered by your insurance company, but you can’t buy more than $10,000 if you own one vehicle. If you own more than one vehicle, you may buy stacked UM/UIM coverage which is discussed below. Long story short, if you want to buy at least $100,000 in UM/UIM coverage, you will also need to buy at least $100,000 in bodily injury coverage.

To answer the question of “how much UM/UIM coverage should you buy?” The answer is always: as much as you can afford. While insurance agents generally say that you only need to purchase enough bodily injury coverage to protect you up to the value of your net worth (I disagree with this by the way), you should buy a lot of UM/UIM coverage. If you are hit by a drunk driver at a high rate of speed who has the minimum insurance required by the State of Florida, and you are severely injured and you do not have UM/UIM benefits, there will not be any money to compensate you for your injuries. If you don’t think this happens often, check again. I have personally handled many cases in which victims are taken to the ambulance form a high speed impact collision either by ambulance on a stretcher or by helicopter with life altering injuries only to find out there is no insurance coverage to help them put their lives back together.

It is terrible, but we live in a world in which we cannot depend on others to purchase enough insurance to right their wrongs. While we shouldn’t have to spend the extra money for insurance coverage to protect ourselves from careless and uninsured drivers, it is a reality of life that you are at high risk of a car accident and also at a significant risk that the accident is caused by someone without insurance.

How do you make a claim for uninsured/underinsured motorist (UM/UIM) benefits?

 To make a claim for UM/UIM benefits, you should notify your insurance company of the accident within thirty days of the accident. That means you must talk to your insurance company which is a general no-no. Read why you should not speak with your insurance company without a lawyer.

The 30-day rule is not a law. It is usually a condition for bringing a claim in your insurance policy contract. Some car insurance companies say that you will waive your benefits if you do not notify the company within 30 days. If you have not notified your insurance company of a claim within 30 days, you may still have a claim for UM/UIM benefits. You will want to speak with an attorney about your options to pursue a claim in that instance.

One of the first things I do after one of my clients is involved in a car accident is send out demands to their insurance companies notifying them of the claim and requesting copies for copies of their insurance policies, so I can be apprised of the terms and conditions for making UM/UIM claims.

After you or your lawyer has notified your car insurance company of a potential UM/UIM claim, it is important to determine whether the person that hit you had insurance. After the accident, a police officer or community safety aide should give you a copy of the driver information exchange report. To read why you should always call the police after any car accident, regardless of how minor, click here

The driver exchange report should include the name and address of the at-fault driver and disclose their insurance company and include their policy number. You will provide this information to your lawyer or – if you want to proceed without a lawyer – you can search the web for the insurance companies claim reporting telephone number and give them a call. You will most likely get an answering service which should direct you to an extension where you can “report a new claim”.

As always, I strongly advise that you hire a lawyer before making this call, however, you will provide the claims representative with the at-fault driver’s name, insurance policy number, and the date and location of the accident. Most claims representatives will ask you a series of questions about the accident and your injuries. Many of these calls are recorded and the insurance company will be fishing for statements they can later use against you if you make an injury claim. Know that you are not required to give them any statements or tell them about your injuries or your medical treatment. You should only give them enough information to open a new claim and give you a claim number.

Once you have the claim number from the at-fault driver, you can formally request a copy of the at-fault driver’s insurance policy disclosures. Under Florida law, insurance companies are required to provide you with these disclosures within 30 days of receiving a request pursuant to Fla. Stat. Section 627.4137.

Note that the letter should be mailed registered mail with return receipt requested for it to have any teeth. I like to send a copy via fax immediately after I get a case so I can call the adjuster and find out the amount of bodily insurance coverage as quickly as possible. As you know, I hate delay. Once you receive the bodily injury insurance disclosures, you will be able to see how much bodily injury coverage the at-fault driver purchased. It may be $0, $10,000, $25,000, or more. 

If the person that hit you had adequate bodily injury insurance coverage, then you may be able to recover compensation for your injuries without having to make a claim against your own insurance policy for UM/UIM benefits. However, as discussed above, if there is no insurance or low coverage limits relative to the severity of your injuries, you will certainly be interested in pursuing a UM/UIM claim.

Should you wait until after settling with the at-fault driver’s insurance company before making a UM/UIM claim?

The short answer is no. Let’s look at an example. Say that you were rear-ended at a stoplight and you sustained a whiplash injury to your neck. This resulted in nerve cord impingement requiring surgical intervention.

In this example, you find out that the at-fault driver was insured for only $10,000.00. The medical treatment you have had in the several weeks since the accident costs $25,000.00 and future care costs are estimated to be another $50,000.00.

 It is clear that the at-fault driver’s $10,000.00 is going to be insufficient to fully compensate you for your injuries. In this scenario, you can demand the bodily injury coverage policy limits from both the at-fault driver’s insurance company and the UM/UIM policy limits from your own insurance company. That said, in most instances, your insurance company will not pay you the UM/UIM policy limits until they see evidence that the at-fault driver has already paid out the bodily injury coverage limits. But at least you’ve got the ball rolling on your financial recovery from both insurance companies.

A word of caution in making your own claim without a lawyer

have heard several insurance companies say that it doesn’t matter whether or not you hire a lawyer, that the insurance company will make the same offer based on the medical records and bills presented to them. My experience representing hundreds and hundreds of people injured in car accidents leads me to believe otherwise.

I strongly advise against making your own personal injury claim either against the at-fault driver’s insurance or your own insurance. There are many nuances and strategies that can be employed by lawyers to get you what you deserve.  

Matthew Waring is the Boca Raton Personal Injury Attorney who appreciates your time.

Matthew Waring understands the sense of urgency many of his clients feel when waiting for a case to settle. For many accident victims with a personal injury claim, their settlement is literally their financial lifeline. 

If you feel like your personal injury case in Boca Raton, Fort Lauderdale, Deerfield Beach, Palm Beach or Miami is not resolving fast enough, contact Matthew Waring today for 100% free consultation.