Uninsured Motorist Coverage Explained

Your Insurance Litigation Attorney – In Texas, all drivers are required to carry uninsured motorist/underinsured motorist coverage on their automobile policy. However, Texas does allow for an “opt-out” of this requirement if you expressly waive this coverage in writing and sign a rejection form. Importantly, under the Texas Insurance Code, it is illegal for your insurance company to raise your insurance rates, drop your coverage, affect your credit, etc. for making an uninsured motorist claim. Therefore, if you have this coverage, you always want to use it.

WHAT EXACTLY IS UNINSURED MOTORIST COVERAGE?

Uninsured Motorist (“UM”) coverage protects you in the event you are hit by an uninsured driver. Essentially, your insurance company steps into the shoes of the at-fault Defendant and pays for the damages that he or she caused you. This includes both property damage and bodily injury. The Texas Department of Insurance estimates between 20%-25% of drivers on Texas roads are uninsured. If you are hit by one of these drivers, and you do not have UM coverage on your own policy, then you are very likely to be in a position where you must repair your own vehicle and pay for your own medical care. You still have the right to sue the at-fault Defendant for their actions and the damages they caused you. However, typically people who drive around without any insurance do not have an ability to pay any judgment levied against them in a lawsuit. In other words, you carry this coverage to protect yourself.

WHY DO I WANT TO MAKE THIS CLAIM ON MY POLICY?

There are several reasons to make this claim. First, as explained earlier, you cannot be penalized by your insurance company for making this claim. Second, you have already paid for this coverage in your auto premium, so you may as well use it. If you are not going to use it, then you need to stop paying for it and giving your insurance company your hard-earned money for nothing in return. Third, these coverages allow you access to medical treatment when otherwise there would not be any.

For example, let’s assume you get into an accident and you incur $20,000 in medical bills and $5,000 in property damage. However, the person who caused the accident does not have any insurance. What do you do now? The only realistic option you have is to make an UM claim with your insurance. You submit your $20,000 in medical bills to them for payment, and they pay the $5,000 in property damage repairs to your vehicle. You are also entitled to compensatory damages on your UM claim, commonly referred to as “pain and suffering” damages.

WHAT ARE THE LIMITS?

The minimum Uninsured Motorist coverage policy limits directly mirrors the minimum liability policy limits in Texas. The current UM minimum limits are $30,000 for each injured person, $60,000 for each accident occurrence, and $25,000 for property damage per accident. This is known as a 30/60/25 policy. For more information on minimum limits policies.

However, it is strongly advisable to purchase more than the minimum coverage to make sure you are fully protected from your medical bills and not left exposed. Under the example listed above, if you have $40,000 in medical bills and only $30,000 in available coverage, you would have to pay the $10,000 “shortfall” that is left over after your insurance carrier pays the $30,000 per person maximum. As a general rule, your UM coverage should match the same coverage limits or your liability coverage.

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