Auto Insurance: Are You Covered? – Uninsured and Underinsured Motorist Coverage

10/20/2011 / Kate Westad

As a personal injury attorney I want to ensure that our clients have adequate insurance coverage for themselves and their families in the event a collision would, unfortunately, occur.

I spend considerable time counseling our clients about automobile insurance and how it works. One thing I find extremely interesting is the lack of education on the importance of adequate Uninsured (UM) and Underinsured (UIM) motorist coverage.

Bottom line: UM and UIM coverage is protection for you and your family in the event of a car crash.

I previously wrote an article on liability coverage entitled: “Liability Policy Limits: Do You Know Your Limits?" The minimum liability limits in Minnesota are "30/60" or a maximum of $30,000 per person and $60,000 per collision. Thus, if you or a family member is injured in a collision, the at-fault driver may only have $30,000 in insurance available to you for a personal injury claim. While you could make an excess claim against the driver and try to obtain a judgment against the driver’s personal assets, many defendants are judgment proof and have little to no personal assets. Further, in Minnesota, a judgment for personal injuries may be discharged in bankruptcy unless the act was intentional or the driver was intoxicated.

So what do you do if you are injured in a collision and the driver has minimum insurance limits or is completely uninsured? That’s when your UM/UIM coverages kick in. In Minnesota, UM/UIM coverages are mandatory for auto owners but the minimum legal limit is only $25,000 per person and $50,000 per collision. Make sure you talk to your agent about what your current UM/UIM limits are and if it adequately protects you and your family given your current financial resources and assets.

So why should you care about your UM/UIM coverage? Here’s an example. Say you are injured by a driver who has no insurance and you only have $50,000 in UM/UIM coverage. Even if you suffer a catastrophic injury where you are no longer able to work for the rest of your life - or in the terrible event you are killed - you or your family could only recover a maximum of $50,000 in UM/UIM insurance benefits.

Also, if you are a motorcycle owner, remember that UM/UIM coverage for your auto does not apply while you are driving your own motorcycle. Also UM/UIM coverage for motorcycle coverage is not mandatory and can be waived in Minnesota. Given that the Minnesota Department of Public Safety states that fatality involved motorcycle crashes are up 30% in Minnesota this year alone - UM/UIM motorcycle coverage should never be waived.

Adequate UM/UIM coverage should be analyzed along with estate planning tools and life/disability insurance coverage to make sure you and your family members can be taken care of in the event of an serious injury or death due to a car crash.

In my opinion you should always buy as much UM/UIM coverage as you can afford and no less than $100,000. You should also strongly consider obtaining umbrella coverage. Talk to a reputable insurance agent to find insurance companies who offer umbrella auto coverage that provides an additional layer of coverage for their own insured’s injuries. Some umbrellas exclude coverage for their own insureds, so be careful and know what you are buying.

Don’t forget that just because you were injured in a crash does not mean the insurance company will automatically pay you for your claim. You have to prove the other driver was at fault as well as proving the extent of your injuries. You also need to meet certain thresholds in order to bring a personal injury claim altogether. If you, a friend or a family member are injured in a motor vehicle crash, consult with an attorney so that your rights are protected and you can get the advice and counsel you need.