If you’re hit by a driver whose insurance doesn’t cover all your expenses, an underinsured motorist (UIM) claim can help bridge the gap. The amount you might receive depends on your injuries, the coverage you hold, and the at-fault driver’s policy. Understanding how this coverage works and what settlements it covers can help you navigate your claim and get the compensation you deserve.

What Is Underinsured Motorist Coverage?

Underinsured motorist (UIM) coverage is a type of insurance that protects you if you’re injured in an accident caused by a driver whose liability insurance isn’t enough to cover your damages.

It’s important to differentiate UIM from uninsured motorist coverage, which applies when the at-fault driver has no insurance at all, while UIM covers situations where the driver is insured but inadequately.

The benefits of filing a UIM claim include the ability to recover damages beyond the at-fault driver’s policy limits, ensuring you are not left covering substantial expenses out of pocket. In most states, UIM coverage helps pay for medical bills, lost wages, and pain and suffering when the at-fault driver’s insurance falls short. It provides financial protection and peace of mind, allowing you to focus on recovery without the burden of unexpected costs from underinsured drivers or hit-and-run accidents.

UIM can also cover certain hit-and-run accidents, depending on your policy. In many cases, hit-and-run incidents are treated like accidents involving an uninsured driver, as there is no identified insurance to pay for the damages.

How Underinsured Motorist Coverage Works

When you’re involved in an accident with an underinsured driver, your underinsured motorist (UIM) coverage helps cover costs that exceed the at-fault driver’s liability limits, based on your policy limits and terms. This type of coverage typically includes:

• Medical Expenses: Covers hospital bills, rehabilitation, and other treatment costs not covered by the at-fault driver’s insurance.
• Lost Wages: Compensates for income lost due to injury, whether you’re temporarily out of work or have a diminished earning capacity. This includes not only wages lost during your recovery but also potential future earnings if your injuries limit your ability to work or reduce your earning capacity over time.
• Pain and Suffering: Provides financial compensation for physical pain, emotional distress, and diminished quality of life resulting from the accident.
• Property Damage: Covers repairs or replacement of your vehicle and any other personal property damaged in the accident.
• Future Medical Costs: Anticipates ongoing medical care or long-term treatment needed after the accident, ensuring that ongoing expenses are addressed.
• Loss of Earning Capacity: Compensates for potential income loss if your injuries impact your ability to work or advance in your career over time.

Your UIM policy works in tandem with your personal injury protection (PIP) or health insurance, creating an additional safety net when the costs of an accident exceed basic coverage.

Is Underinsured Motorist Coverage Required?

Whether underinsured motorist (UIM) coverage is required depends on the state you live in, as regulations vary widely across the U.S. Some states mandate UIM coverage as part of your auto insurance, ensuring drivers are financially protected if an accident exceeds the at-fault driver’s policy limits.

For instance, states like Connecticut, Illinois, Maryland, and Minnesota require UIM coverage as part of the minimum insurance package. In contrast, states like California, Florida, and Tennessee allow you to opt out by declining it in writing. Meanwhile, states such as Texas and Virginia strongly recommend it but leave the choice to the driver. Review your state’s specific requirements to decide if adding this important layer of coverage is right for you.

What Influences the Amount You Can Recover from an Underinsured Motorist Claim

Several factors determine the amount you can recover from an underinsured motorist (UIM) claim, each affecting the potential settlement:

• Severity of Injuries: The more severe your injuries, the higher your potential compensation, as extensive medical care and recovery are often required.
• Medical Bills and Rehabilitation Costs: The total expenses incurred for treatment, surgery, physical therapy, and any future medical needs can significantly increase the claim value.
• Policy Limits: Your UIM coverage has a maximum limit, which caps how much you can recover. For example, if your UIM policy limit is $100,000, that is the most your insurer will pay for your claim, regardless of the total damages. Some states also allow you to “stack” UIM coverage across multiple vehicles in your policy, increasing your potential compensation.
• At-Fault Driver’s Insurance Limits: The liable driver’s policy sets a baseline, as UIM coverage kicks in only after their policy limits are exhausted. For instance, if the at-fault driver’s insurance covers up to $25,000, your UIM claim can only cover the difference between their limit and your total damages.
• Strength of Evidence: Clear evidence supporting the extent of your damages—such as medical records, accident reports, and expert testimony—can influence the settlement’s value.
• Lost Wages and Reduced Earning Capacity: If injuries cause you to miss work or limit your ability to earn in the future, these losses are often included in the claim.
• Pain and Suffering: Compensation for physical pain, emotional distress, and loss of quality of life depends on the impact of the injuries on your daily living.
• State Laws and Regulations: UIM claim rules vary significantly by state and can impact how you pursue compensation. For example:
  • In some states, UIM coverage is mandatory, while in others, it’s optional or requires a signed waiver to opt out.
  • Certain states have specific time limits for filing UIM claims, called statutes of limitations, which could range from 1 to 6 years.
  • How fault is determined plays a crucial role in the claim value; states with “comparative negligence” laws may reduce your compensation if you’re found partially at fault, while “no-fault” states may limit your ability to make a claim against the other driver.
  • Additionally, states may have unique rules regarding “stacking,” or combining UIM coverage across multiple vehicles or policies, potentially increasing your claim amount. Understanding your state’s laws is essential for maximizing your compensation.

How Do You Calculate Underinsured Motorist Coverage?

Calculating underinsured motorist (UIM) coverage requires assessing the total damages from an accident and then subtracting the at-fault driver’s liability coverage. For example, if you suffer $100,000 in damages (medical bills, lost wages, and pain and suffering) and the at-fault driver’s policy limit is $25,000, you would look to your UIM policy to cover the remaining $75,000. However, your UIM policy limit is crucial; if you have $50,000 in UIM coverage, then that’s the maximum amount your insurer will pay, leaving you responsible for any remaining costs beyond this limit.

Can You File an Underinsured Motorist Claim If You Were Partially at Fault and How It’s Calculated?

You may still file a UIM claim even if you share some fault for the accident. However, calculating UIM coverage can become more complex if you are partially at fault for the accident, as your share of fault will impact your total recovery. In states with “comparative negligence” laws, your compensation is reduced by your percentage of fault.

For example, if the total accident damages are $150,000, the at-fault driver’s liability limit is $50,000, and you are found to be 20% at fault, your recoverable damages are reduced to $120,000. Your UIM policy, with a limit of $100,000, would then cover the remaining $70,000 after accounting for the at-fault driver’s contribution and your share of fault.

Here’s how it works: the fault percentage of 20% reduces your recoverable damages to $120,000 (80% of $150,000). The at-fault driver’s insurance pays $50,000, and your UIM coverage would cover the remaining $70,000—up to your policy limit. If your UIM limit is $100,000, your insurer would pay $70,000 to fully cover the remaining damages after accounting for your share of the fault.

As you see, calculating UIM coverage accurately in partial fault cases can be challenging, requiring careful assessment of fault, damages, and policy limits.

Filing an Underinsured Motorist Claim (UIM) Process

Filing a UIM claim can help cover costs after an accident when the at-fault driver’s insurance falls short. Understanding each step of the process is key to maximizing your compensation and protecting your rights. From confirming eligibility to gathering evidence and negotiating a settlement, here’s a breakdown of how to navigate a UIM claim effectively.

1. Confirm Eligibility
   Verify that you have UIM coverage as part of your auto insurance policy and that your damages exceed the at-fault driver’s liability limits. Understanding your policy terms and your state’s requirements is crucial before moving forward with a claim.
2. Report the Accident
   Immediately report the accident to your insurer and the at-fault driver’s insurer, providing all initial details. Avoid making assumptions about fault or the total damages, as these will be determined later through investigation.
3. Gather Evidence
   Collect all necessary evidence to support your claim. This includes police reports, medical records, photos of the accident scene, repair estimates, and witness statements. These documents will be essential to demonstrate the full extent of your damages, such as medical costs, lost wages, and pain and suffering. Ensure you’ve also exhausted any personal injury protection (PIP) benefits if required by your state.
4. File the UIM Claim and UIM Demand Letter
   Submit your UIM claim to your insurer along with all supporting evidence and a formal demand for compensation based on your policy limits. The demand outlines your damages, the at-fault driver’s insufficient coverage, and the amount you’re seeking. The insurer will review your documentation, potentially conduct their own investigation, and assess the severity and cost of your injuries before responding with a settlement offer.
5. Negotiate for a Settlement
   Engage in discussions with your insurer to reach a fair settlement. This step can be complicated, as insurance companies may try to minimize their payout or challenge the damages claimed. A car accident lawyer can significantly assist by presenting strong evidence, advocating on your behalf, and negotiating for the highest possible settlement.
6. Consider Legal Action if Necessary
   If you cannot reach a satisfactory settlement, consider filing a lawsuit. While most UIM claims are resolved outside of court, the possibility of litigation can sometimes lead to a more favorable offer.

It’s important to act promptly, as timelines for filing and settling UIM claims vary by state, with statutes of limitations ranging from 1 to 6 years. Also, the underinsured motorist claim takes anywhere from a few months to over a year, depending on the complexity of the case and the insurer’s response, but each step you take helps protect your rights and ensure fair compensation.

Common Obstacles in Filing an Underinsured Motorist Claim (UIM) Process

While filing a UIM claim can offer vital protection after an accident, the process comes with challenges that can impact your recovery. One major hurdle is the burden of proof; you must clearly demonstrate the full extent of your damages, from medical expenses to lost wages and pain and suffering, which requires thorough documentation. Another issue is that UIM policies often have coverage limits, which might not fully cover your damages, leaving you responsible for out-of-pocket costs even after a settlement.

Delays and disputes with insurers are also common. Insurance companies may challenge the validity of your claim, minimize your damages, or delay payment, which can lead to a lengthy negotiation process. Furthermore, state regulations can complicate the claim, as rules differ significantly, particularly in how fault is assessed, how much compensation is allowed, and whether certain damages are capped. The complexity of these laws may require legal guidance to ensure all conditions are met and to prevent missteps that could reduce your payout.

The amount you can recover depends on factors like your damages, policy limits, and the at-fault driver’s coverage. While every case is unique, UIM coverage helps fill the gap when the other driver’s insurance falls short, potentially covering medical bills, lost wages, and pain and suffering up to your policy limits. Our car accident attorneys at Steinger, Greene & Feiner have the expertise to interpret policy terms, calculate damages, and negotiate with insurers to support your UIM claim effectively. We will help to maximize your compensation and ensures you navigate the claims process smoothly.