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What is Underinsured Motorist Coverage and When Does it Apply?

UM/UIM is coverage that is available through your own car insurance policy. “UM” stands for “Underinsured Motorist” coverage and “UIM” stands for “Uninsured Motorist” coverage. These are two separate coverages that apply in two separate circumstances. Both coverages apply only when your auto accident is the fault of another. If the accident is your own fault, you won’t be covered by UM/UIM.

Underinsured motorist coverage applies when your damages exhaust the insurance available from the individual who struck you. As of 2011, the state mandated minimum policy limits for bodily injury car insurance in Texas is $30,000.00. If your injuries produce medical bills that exceed $30,000.00, then it is safe to say that the individual who struck you is “underinsured.” Of course, many people have more than the minimum policy limit in insurance, so just because you have high medical bills doesn’t mean the other party is underinsured. If your policy has underinsured motorist coverage and your medical bills exceed the other party’s limits, you still may not be able to pursue your own coverage. First, you have to receive a full policy limits offer from the other insurance company. Once you have received that offer, your attorney will send a copy of the offer, in addition to a copy of the other party’s insurance declaration page (showing what the policy limit is) to your insurance company.

At that time, your insurance company may conduct an asset check on the other party. If the individual who struck your vehicle has assets available to pay a claim, your insurance company may reject your UIM claim on the basis of availability of assets. This means that your attorney will have to pursue the other party directly for additional compensation. For example, if your vehicle is struck by a wealthy oil man, and he only has a minimum limit policy, his wealth is not protected by a small insurance policy. You are free to pursue him directly and his insurance company will only be responsible to pay for $30,000.00 of what he owes you. If, however, the person who injured you does not have assets, then your UIM coverage will kick in and cover the rest of your injuries, including pain and suffering, up to the policy limit amount of your UIM coverage. It is important to understand that just because it is your own insurance company, it doesn’t mean that they will just hand over the money. Your insurance company will “stand in the shoes” of the other insurance company, continuing to argue and negotiate the claim on the basis of its strengths and weaknesses.

Underinsured motorist coverage can provide you significant protection in the event of a serious auto accident. You may want to call your own auto insurance company today to find out how much coverage you have. If you have been injured in a car accident through no fault of your own, contact the attorneys at The Voss Law Firm today for a free consultation.
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The Voss Law Firm, P.C. represents clients on a local, national and international basis. We proudly serve companies and individuals along the Gulf Coast and around the globe on a contingency fee basis. Our law firm collects nothing unless we recover on our client's behalf.

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