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Uninsured Motorist (UM) & Underinsured Motorist (UIM) Claims in New Jersey


There are a variety of types of automobile insurance drivers in the State of New Jersey can avail themselves of through their auto insurance carrier. While most people are familiar with liability insurance (the insurance coverage that helps cover the costs of the other driver’s property damage and bodily injuries in an accident), and collision insurance (the coverage that helps you pay for the repair or replacement costs of your own vehicle), most drivers in New Jersey are unaware of the protections afforded by two other, related types of automobile coverage: uninsured motorist (UM) coverage and underinsured motorist (UIM) coverage.

What are UM & UIM Coverage?

As stated before, liability insurance is the type of automobile insurance coverage a driver purchases which helps to cover the costs of the other driver’s property damage or bodily injuries in an accident. Image you are in an accident. Just as your liability insurance would help cover claims made by the other driver against your insurance company, the reverse is also true – the other driver’s liability insurance would help cover property damage or bodily injury claims brought by you against their insurance company.

But what happens if the other driver doesn’t have liability insurance? What if the driver of the vehicle is not named on the policy? What if it wasn’t their vehicle and they were borrowing someone else’s?

Enter, UM insurance.

As a responsible car owner, you bought an auto insurance policy that protects you and others in the event of a car accident. Unfortunately, not everyone has such foresight. In fact, an estimated 1 out of 10 New Jersey drivers either don't have auto insurance, or have a policy (such as a basic or special policy) which does not provide adequate liability coverage in the event of an accident. Even scarier, auto insurance provider eSurance estimates that 1 in 8 drivers nationally are not insured.

This is what UM insurance is all about. Uninsured Motorist Insurance (UM) pays for bodily injuries, such as medical expenses, that result from an accident caused by a driver who is uninsured. UM insurance also protects you and your passengers if struck by a hit-and-run driver or a driver who was not named on the policy.

Covered UM expenses for you and your passengers can include medical bills, lost wages and income continuation benefits, and pain and suffering.

By contrast, although similar to Uninsured Motorist coverage, Underinsured Motorist Insurance (UIM) pays for medical expenses that result from an accident caused by a driver who has too little liability insurance to cover the cost of all of the injuries.

Additionally, Uninsured Motorist coverage and Underinsured Motorist coverage provide reimbursement for medical expenses resulting from your injuries and for property damage resulting from the accident itself. Here is a handy chart to better understand this range of coverage:

How do UM & UIM Claims Work?

When an accident caused by an uninsured or “phantom” hit-and-run driver results in serious injuries that cause considerable financial loss, provided you have Uninsured Motorist Insurance, you are permitted to sue your own insurance carrier. An arbitration or a lawsuit can result in the insurance carrier paying for costs not covered under PIP, including actual expenses that exceed policy limits as well as compensation for damages such as pain and suffering.

Similarly, when you sue someone who is insured after an auto accident, their liability insurance coverage protects them and provides you with compensation for medical expenses and lost wages, for example. But suppose their liability insurance is insufficient to cover your costs.

For example, suppose the driver who struck your vehicle has basic $15,000/$30,000 liability insurance, but you have sustained significant injuries which require you to have substantial surgical intervention. After having filed a claim against the defendant driver’s insurance company for the underlying $15,000, you may also file a UIM claim against your own insurance carrier (in this hypothetical, assume you have $100,000/$300,000 in UIM coverage) for the remaining $85,000 in coverage ($100,000 in UIM, less the $15,000 recovered in the underlying suit). Note that the amount recovered from the defendant’s insurance policy is deducted from your UIM coverage limit, and is not recoverable in addition to this limit – therefore, $85,000; not $115,000.

Hire an Experienced UM/UIM Attorney

Unfortunately for most New Jersey drivers, insurance companies are not particularly helpful in explaining to you the impact of your insurance choices, and how to maximize your protections while minimizing your costs.

If you or a loved one have been involved in an accident, call Drinkwater & Goldstein, LLP today for a free over-the-phone consult. Our experienced personal injury attorneys know the intricacies of New Jersey automobile insurance coverage and can help determine if you have uninsured or underinsured motorist coverage available to you.There is no cost to you unless we secure financial recovery on your behalf! Call (856) 753-5131 today!

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