In Clark and Steinhorn's series on understanding your Maryland auto insurance policy, we touched on the declaration sheet, an all-important document which spells out who is covered by the policy, which cars are covered and what the coverages are. See:http://www.maryland-law.com/library/laurel-maryland-lawyer-on-how-car-insurance-works-.cfm
Our first article concerned "Bodily Injury Liability Coverage" which essentially protects injured victims of car and truck crashes from the negligence of the vehicle's driver. Included in this class of people are passengers in the negligent or "at-fault" drivers' vehicle and any other individuals injured by the "at-fault" driver whether pedestrians or occupants of other cars and trucks involved in a crash.
Obviously there are often disagreements about who the "at-fault" driver is particularly in multi-vehicle car and truck accidents. The bottom line, if someone is claiming that you, as a driver, caused them injury, the bodily injury liability coverage is what provides you coverage for any such personal injury claims.
Today we focus on "Uninsured Motorist Coverage". The name seems to describe its function. If you are in a car or truck collision and the other driver, in violation of Maryland or D.C. law, doesn't maintain insurance, then your uninsured motorist coverage kicks in and provides benefits for your vehicle's operator and passengers.
Simple enough right? Well as with most things legal there is more than meets the eye to uninsured motorist coverage. It should really be called uninsured and "underinsured" motorist coverage. That is because U.M. coverage as we shall call it, provides extra insurance in case you are in a crash with someone who maintains low or lower insurance bodily injury limits.
Lets use an example. In Maryland drivers are obliged to maintain a minimum of bodily injury liability insurance that insures $30,000.00 per individual and $60,000.00 per incident. Which is to say if you are in a Maryland crash and you injure four people, the most anyone of the four can collect from you under your policy is $30,000.00 and the most your four victims can collect from your insurance when all of their claims are combined is $60,000.00.
So what happens in our example if all four of the victims have severe personal injury and their claims are clearly worth more than $30,000.00 each? The answer is that the claimants can turn to their U.M. coverage to make up the difference, if they or the vehicle in which they were riding had U.M. limits which were higher than the bodily injury limits of the at-fault driver.
So if victim #1 has a claim worth $50,000.00 it is obviously more than the minimum Maryland limits of $30,000.00 and the most victim #1 can get from at-fault drivers policy is $30,000.00 and the additional $20,000.00 of value in their case can be realized from their own U.M. coverage if it is higher than the Maryland minimum.
Continuing this example, if victim #1's claim is worth $50,000.00 and victim #2's claim is worth $100,000.00 and victim #3's claim is worth $150,000.00 and victim #4's claim is worth $200,000.00 the total value of all the claims combined is $500,000.00. Thus the at-fault driver's Maryland minimum limits policy of $30,000.00 per claim and $60,000.00 per incident is going to be woefully inadequate.
This is bad for the at-fault driver because they may be personally responsible for $440,000.00 of injury claims. It is bad for the injured victims each of whom will receive a fraction of the value of their claims and in no event more than $30,000.00! Fortunately in many such accidents underinsured/uninsured motor coverage (U.M.) comes to the rescue.
So what amount of U.M. coverage would make the crash victims whole? The most obvious answer is that a U.M. policy that provides at least $200,000.00 per individual claim and total coverage of $500,000.00 per incident would do the trick. Such a coverage as this is a little unusual as it would more typically be offered as a $250,000.00 per person and $500,000.00 per occurrence or $500,000.00 single limit coverage.
What does single limit coverage mean? It means that there is a total of $500,000.00 in U.M. coverage which could all go to one individual victim or could be divided between however many injured parties there are.
So the bottom line is that the U.M. insurance coverage you maintain is very important in case an inadequately insured person crashes into your vehicle. Fortunately uninsured motorist coverage is comparatively inexpensive. In looking at my declaration sheet the U.M. costs approximately 20% of the cost of my bodily injury coverage! It costs about half of my P.I.P. coverage (P.I.P. will be featured tomorrow) and 1/3 the cost of property damage liability insurance.
So get out your Dec sheet and look at your U.M. coverage and make sure you have enough or an uninsured or underinsured motorist could cause you big problems.