Virginia Uninsured-Underinsured Car Insurance: The Most Important Car Coverage | Shapiro, Washburn & Sharp

What happens if you are in a car accident and the other driver turns out to have minimum or inadequate car insurance? Unfortunately, under some state laws, you will not find out the amount of the at-fault driver’s car insurance until months after you have suffered an injury.

First, let me define the situations when underinsured car driver insurance (called UIM as explained below) applies:

1. Hit and run drivers

  • If the driver hits your car and injures you but never stops at the scene, and the license plate number cannot be located. In Virginia and nearly all states, you can make a claim through the uninsured motorist coverage of your insurance policy.

2. The at-fault driver has minimal insurance coverage

    • These are the situations where underinsured driver/motorist coverage comes into play (adjusters and injury lawyers refer to this as UIM coverage). In Virginia, you are only required to have $25,000 of liability car insurance and some states only require $15,000 of liability insurance coverage. If the other driver causes serious injuries to you or a family member and only has a $25,000 liability policy, you will probably need to use your UIM coverage to pay for your expenses.
    • States differ on how underinsured motorist coverage can be applied when the other driver does not have adequate coverage for the magnitude of your or a family member’s personal injuries.
    • In Virginia, the analysis of how much UIM coverage may apply is an offset against the available minimum insurance of the other driver (for example, if your uninsured/underinsured motorist coverage on your own car policy exceeds the minimum coverage of the other driver, you are entitled to the difference, called the offset, of how much more underinsured motorist coverage you have access to).
    • In other states, you are entitled to all of the uninsured motorist coverage under yout policies, in addition to the available minimum insurance coverage of the other driver that is at fault.

How UM/UIM Coverage Works

In Virginia, North Carolina, and many other states, a typical car insurance policy provides that if you are in a car accident and suffer personal injuries caused by any driver with no car insurance, or inadequate insurance, your own car insurance will provide coverage to protect you. This works in a strange way:  your car insurance company provides a legal defense to uninsured/underinsured drivers and must pay up to the total uninsured/underinsured motorist insurance coverage the policy provides (this depends on the severity of the injuries and the damages and the analysis varies by state on how underinsured car insurance coverage applies).

So, underinsured driver/motorist coverage (“UIM”) takes care of the situation where the at-fault driver has some insurance, but not enough to adequately compensate the injured party. Under either scenario, the policy pays for any aspect of bodily injury damages that the injured party could recover from the at-fault driver, such as medical expenses, lost wages/earnings, pain and suffering, recoverable in any personal injury or wrongful death suit. UIM coverage provides protection not only if you are in your own car but also if you are in someone else’s car. Uninsured/underinsured driver coverage also extends to the policyholder’s family members and covers other vehicle/car-related accidents, such as hit and runs, or pedestrians or bike/cyclists who are struck and injured by a car.

Data on Accidents Can Help in Determining Coverage

Looking at statistics can help you make a decision about purchasing uninsured/underinsured motorist coverage. On average, there are around 6 million car accidents each year in the United States. It is difficult to know the exact number of motorists on the road with insufficient insurance (as they are only discovered if they are in an accident), but studies estimate that approximately 14% of all drivers have inadequate insurance or no insurance at all.

Let’s use a real scenario that a recent client faced when she was a back seat passenger in her friend’s car and was hit nearly head-on by a drunk driver in Northern Virginia in 2008. My client had a $50,000 uninsured motorist coverage under her own car insurance policy (which applies even though she was not in her car) and we learned that her friend who was the driver of the car she was in, also had a $50,000 uninsured motorist coverage. The drunk driver had only $25,000 liability coverage, likely because she had already had a prior DUI/DWI conviction.

In Virginia and in most states, any uninsured motorist coverage on the host car (car the injured victim is riding in) may be combined with any other uninsured motorist policy coverage that a person has on their own car or cars. Therefore, in this situation involving the drunk driver in Northern Virginia, my client was able to access $100,000 in underinsured driver/motorist coverage (UIM). Fortunately, my client did not have a $25,000 minimum uninsured motorist coverage, and she was simply fortunate that her friend who was driving and was not at fault also had a $50,000 uninsured motorist coverage.

What Steps You Should Take Now

Our motto is that more coverage is always safer. You should ask yourself if $100,000 in UM/UIM coverage is enough on your own policy. Remember this is the coverage that’s going to apply to you or your family member after a potentially serious accident.

If you have the financial means to do so, we recommend obtaining at least $250,000 in UM coverage.  In many states, this means that you must increase your bodily injury liability limit to equal to or higher than $250,000 as well. If you have the financial means to do so, are further recommendation is to have at least $500,000 of liability and uninsured motorist coverage.

Why the higher numbers? Because you never know how bad a car wreck will be. You could wind up in a fender bender or a head-on crash that results in life-altering injuries like a broken neck, torn ligaments, a traumatic brain injury, and so on. Having at least $250,000 in UM coverage provides a stronger cushion in case you’re the victim of a hit-and-run or are hit by an underinsured driver.

Keep in mind you cannot increase your coverage immediately after you are in a terrible car accident as that increased coverage will not apply to the injuries sustained before you changed your coverage.

The Bottom Line

The bottom line is that you need to get out your car insurance policy and study your coverage.

Our law firm has had numerous clients explaining that they have “full coverage” on their car insurance policy, and when we get the policy information after they’ve been in an accident, we discover that there is only $25,000 of liability and uninsured driver coverage. “Full coverage” usually just means that your policy has liability, property damage, and uninsured motorist protection but this still could be totally inadequate if it is at $25,000, for example.