When I am interviewing a prospective client for the first time regarding a car crash, I always ask them what type of automobile insurance they had on their own car or truck. The usual response is “I had full coverage.” When I then ask what “full coverage” insurance they had, most people don’t know. This is because the topic had never come up until they were involved in a crash.
One type of coverage that is usually part of a “full coverage” auto insurance policy is called Underinsured Motorists Insurance. As compared to Uninsured Motorists coverage that only applies when the person who caused the crash had no liability insurance, Underinsured Motorists coverage comes into play when the at fault driver did have liability insurance, but not enough insurance to fully compensate the injured person. For example, if a person’s injury claim is worth $100,000 and the at fault driver only had $50,000 in liability insurance, the injured person’s Underinsured Motorists insurance would pay an additional $50,000 to the injured person so that they are fully compensated.
Like Uninsured Motorists coverage, Indiana law requires that Underinsured Motorist coverage be offered in every automobile policy. If the policyholder doesn’t want this coverage, it must be declined in writing. Otherwise, it is automatically included. Indiana law also requires that the minimum amount of Underinsured Motorists coverage that can be offered is $50,000 per person or $100,000 per accident.
As with all insurance polices, there are a number of things in the “fine print” to be aware of. First, if the insurance company for the person who caused the crash is offering to pay their liability insurance policy limits to the injured person, the injured person must first get permission from their own auto insurance company to accept this policy limits offer. If this permission is not obtained first, then any coverage for Underinsured Motorists benefits is voided.
The rational for this provision is that if the insured person signs a release of all claims in favor of the at fault driver without first getting this permission from their own insurer, then the insurer which provides Underinsured Motorists coverage has no chance of being reimbursed for what they may have to pay in the claim from the personal assets of the at fault motorist. I see this as a somewhat questionable rationale, since in the vast majority of cases the at fault motorist doesn’t have any assets anyway other than the proceeds of their liability insurance policy. Nevertheless, Indiana courts have upheld this provision.
The other caveat to be aware of is that whatever Underinsured Motorists a person may have is reduced by the amount of liability insurance that the person had that caused the crash. Thus, for example, if the person who caused the crash had $25,000 in liability insurance and the person who was injured had $100,000 in Underinsured Motorists coverage, then there would only be $75,000 in Underinsured Motorists coverage available, even if the value of the claim is worth substantially more than $100,000.
As all insurance claims and especially Underinsured Motorists claims can be complex, give me a telephone call for a free consultation regarding what insurance coverage is available and what you are rightfully entitled to receive in your claim. As an Indiana accident attorney, I make it a priority to educate people about their legal rights.
