Introduction to Uninsured or Underinsured Motorist Coverage (UM/UIM)

Uninsured or Underinsured Motorist Coverage

According to the Insurance Information Institute (III), 12.6 percent of drivers are uninsured nationwide. Florida’s rate of uninsured drivers is substantially larger. The 2019 study from the Insurance Research Council shows that approximately 20.6% of Florida drivers are uninsured. This is a huge issue for drivers on the road. There are numerous individuals who are severely injured and cannot be compensated for their injuries because there are no assets or insurance to pursue to seek compensation.

Fortunately, there is a way to protect yourself from uninsured and underinsured drivers on the road. As discussed here, Florida motorists are only required to carry Property Damage (PD) and Personal Injury Protection (PIP) on a registered automobile. Although a driver may be insured, they may not carry bodily injury (BI) coverage. This BI coverage would compensate an individual injured by a negligent driver. Another situation that may arise is that there may not be enough BI coverage on a negligent driver’s insurance policy.

In any of these situations where a driver is either uninsured (does not carry insurance whatsoever) or underinsured (does not carry enough BI coverage to fully compensate an injured individual) you are able to purchase Uninsured/Underinsured (UM/UIM) insurance. This coverage can compensate you for the damages you sustain in an automobile collision where there is either no other insurance or not enough other insurance.

When purchasing an insurance policy, the insurance company will give you the opportunity to select or reject UM/UIM. They are required to offer you the opportunity to accept or reject UM/UIM. It is further required that if you do choose to reject the coverage, there must be a signed UM/UIM rejection form. If there is no signed UM/UIM rejection form, you may still be able to qualify for UM/UIM in the amount of any bodily injury coverage you purchased.

Making a Claim

The process of making a UM/UIM claim is essentially the same as a normal bodily injury claim. Typically, a UM/UIM carrier will not even consider making a payment of UM/UIM benefits until all other liable bodily injury policies have been exhausted. This is not always the case. Depending on the severity of your injuries and several other factors, the UM/UIM carrier may make the decision to issue payment if they believe the value of your damages exceeds the other available insurance. Your UM/UIM carrier has the right to seek financial remuneration from the at-fault party and/or their insurance. It is important to consult with a personal injury attorney as this right of subrogation can affect your settlement.

Unlike a third-party injury claim against another person, if a lawsuit is necessary you will be suing your insurance company directly. If you file a lawsuit, the insurance company will have all the same defenses that the uninsured/underinsured driver would have if the claim was brought against them. This means that the insurance company will likely contest everything that they can including liability, causation, and damages.

Bad Faith

An insurance company acts in bad faith when it commits any of the following acts: 1. Not attempting in good faith to settle claims when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests; 2. Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth the coverage under which payments are being made; or 3. Except as to liability coverages, failing to promptly settle claims, when the obligation to settle a claim has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage. Under the common law in Florida, there was no claim for bad faith for a first-party claim (one against your own insurance company). The right arose via Florida Statute. As a result, there are strict requirements that must be met in order to be able to make a claim for bad faith. It is important to follow these requirements or you will not be able to make a claim for bad faith even if the insurer has committed any of the above-listed acts.