8th Oct 2014

Most of us buy insurance coverage for situations where we get hurt by an at fault driver who does not have insurance (uninsured motorist – UM) or does not have adequate insurance (under insured motorist – UIM) to cover the damages caused by an accident. This part of our policy covers bodily injury only, not medical expenses per se nor property damage such as the loss of an automobile. The premiums for UM/UIM cannot be increased due to a claim against our own insurance since the claim is not due to our own fault, rather it is the fault of another who is not adequately insured for the loss (the very reason we also bought this coverage in the first place). Normally, most of us have UM/UIM coverage of at least limits similar to our own bodily injury liability limits (in Colorado the minimum is $25,000).

This insurance typically covers yourself, your spouse and relatives who reside in the household and it will pay all the bodily injury damages up to the limit of the purchased coverage. Since this damage includes medical expenses, it will pay for unpaid medical expenses as part of the total payment for bodily injury, but the insurance company will not pay for medical expenses as incurred only as part of the final settlement for all injuries. Initial medical expenses come from separate coverage called “med-pay” related to the car in which you were the operator or a passenger. That total amount for UM/UIM will not be paid until a one-time payment when the doctors know the prognosis for all your injury and you have an estimate of how badly and for how long into your future you are affected by the injuries. Sometimes your injuries may be permanent and disabling. They affect your work and your leisure and must be evaluated and compensated for accordingly.

So UM/UIM, even if you are only covered as a resident of your folks’ household, will compensate the amounts not adequately covered by the at fault driver’s insurance for your injuries and your medical expenses (past and future) and the premium should not be affected since you were not at fault. In my experience UM/UIM coverage is commonly involved in about ½ of all accidents in Colorado since our required coverage amount is so low at $25,000. Most of us then buy and make use of much higher coverage through our own policy.  There may also be additional coverage under and “umbrella policy clause”.

Be especially careful with any UIM claim however because many insurance companies typically try to “low ball” an offer on payment (above the medical bills) for your pain and suffering and permanent injury and do not offer what your claim is fully worth. This is when you will need a lawyer.

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