When purchasing insurance to cover the motor vehicles that we all drive to work, to visit friends and family, to go to a ballgame, or to take a road trip, it is instinctive to think about insuring against the risk of property damage to our own vehicles, and it is customary to consider the importance of liability insurance that will cover us in case we cause an automobile accident.
One type of coverage that might not come readily to mind is uninsured and/or underinsured motorist insurance, commonly referred to as UM and UIM, respectively. UM/UIM coverage can be significantly and uniquely important in the Mount Washington Valley/Maine Lakes Region because while the state of Maine requires car insurance, the “Live Free or Die” state of New Hampshire does not.
By way of brief background, uninsured motorist (UM) insurance—which generally only provides coverage if the other driver is found to be at fault for an auto collision—can cover the innocent driver’s medical expenses, lost wages, and other injury related expenses in an instance where the at-fault-driver is not insured. Underinsured Motorist (UIM) coverage can protect you and your family by financially compensating you for an injury in the event that you are injured in an accident caused by another driver who has liability coverage in an amount less than the amount of the your own underinsured coverage (keep in mind that you can only make a claim for the amount of your underinsured coverage in excess of the at-fault-driver’s coverage amount).
UM/UIM coverage may also cover you when you are a pedestrian or when you are riding a bicycle. So, if you are hit by a car while walking your dog or riding your bike with your kids, and if the driver that hits you has no insurance or very minimal insurance; then your own UM/UIM policy may be able to provide you with coverage for your damages (which could include medical bills, lost wages, pain and suffering, etc.).
Additionally, you may also be able to rely on your uninsured coverage if you are the unfortunate victim of a hit-and-run.
In addition to your own auto insurance policy, if you reside with a member or members of your family, any vehicle owned by family members with whom you reside may also provide you with uninsured motorist coverage.
UM/UIM coverage can be extremely important financially because if you are injured in an accident caused by another driver in Maine, the minimum coverage required by Maine law is as follows:
- Bodily Injury Liability Coverage: $50,000 per person and $100,000 per accident (this means no more than $50,000 for anyone injured person, but it also means no more than $100,000 total, even if 5 innocent people in the same car are injured by a reckless or drunk driver);
- Property Damage Liability Coverage: $25,000 per accident;
- Uninsured Motorist Coverage: $50,000 per person and $100,000 per accident;
- Medical Payments Coverage: $2,000 per person (this type of coverage pays the insured driver’s own medical bills and is supposed to be automatic).
What the above minimums mean is that if you are seriously injured in a car crash caused by someone else, and you have medical bills and lost wages that total more than $50,000; if the other driver has the minimum coverage, then the insurance policy limit of $50,000 will not cover all your costs and expenses, let alone provide any compensation for your pain and suffering.
In New Hampshire (or when traveling in/through New Hampshire), UM and/or UIM coverage is arguably more important—especially for a Maine resident—because (a) there is no requirement to purchase auto insurance in NH, and (b) even if an NH driver has insurance, the minimum amount of insurance that is required to cover bodily injury in NH is only $25,000, or, in other words, one-half (1/2) of the amount of Maine’s minimum requirement. NH’s minimum requirements are as follows:
- Bodily Injury: $25,000 per person and $50,000 per accident (1/2 of what it is in ME);
- Property Damage: $25,000 per accident (same as ME);
- Uninsured/Underinsured Motorist: $25,000 per person and $50,000 per accident (however the amount of coverage must be the same amount as the liability coverage amount; so if you purchase $50,000 of liability coverage in NH, then you also have to get $50,000 of UM/UIM coverage);
- Medical Payments: $1,000 per accident (1/2 of what it is in ME)
Beyond the general benefit of UM/UIM coverage, three more specific things to keep in mind, especially if you ever need to make an underinsured motorist claim, are:
- You must get permission from the insurance company that will be providing the underinsured coverage (generally this will be your own insurance company) before you settle your claim with the at-fault-driver’s insurance company in order to preserve your right to make a claim for underinsured motorist coverage. If you don’t get prior permission, you may waive your right to any and all possible claims for any underinsured benefits of any kind and in any amount.
- You may be able to “stack” coverage. This means, for example, that if you have your own insurance policy and are on a significant other’s insurance policy (or if you insure multiple vehicles); then you may be able to combine the underinsured coverage amounts to provide greater underinsured coverage. For example, say you are a Maine resident traveling from Mexico, Peru, Denmark, Norway, Sweden, Paris, Naples, Rome, Poland, or even China, Maine through New Hampshire on your way to La Ronde in Montreal, Québec, Canada and a New Hampshire driver with a minimum $25,000 policy limit smashes into you, but you have $125,000 in medical bills… if you have two auto policies with underinsured coverage in the amount of $100,000 each, you may be able to stack (i.e., combine) the underinsured coverage in each policy for a total of $200,000 of underinsured coverage. Because of how insurance policies are written and interpreted, this could give you extra coverage in an amount ranging from $150,000 to $200,000, which is 6 to 8 times more coverage and should at least help cover all of your medical bills.
- Although UM and/or UIM coverage is an important way to provide yourself with extra protection no matter what kind of car you drive; motorcycle riders may want to give even more thought and consideration to adding increased UM/UIM coverage. In a recent case, the driver of a sedan pulled out in front of a motorcycle rider and the rider was seriously injured. The rider settled with the at-fault-driver’s insurance company for the at-fault-driver’s policy limit of $100,000. Because of how the motorcycle rider’s $100,000 underinsured coverage policy was written, the rider could not make an underinsured claim against his own insurance. If however, the motorcycle rider had underinsured coverage in the amount of $250,000, the rider would have been able to make a claim for up to an additional $150,000 from his own insurance company.
So, even if you believe that you are the world’s safest driver, UM and UIM coverage help to financially protect you from all of the reckless and dangerous drivers out there with no car insurance or with the minimum amount of insurance.
Posts contained on this website do not create an attorney-client relationship and are not intended to provide legal advice. Posts are for the sole, limited purpose of providing general information only. Because most, if not all, legal matters are unique in one way or another, and because laws are subject to change, individuals are encouraged to consult with an attorney of their choosing regarding individual circumstances and legal questions/needs.
