What happens if a negligent driver injures you in an accident, but that driver has minimum insurance coverage?  Who will pay for medical care, lost wages, and compensate you for your pain, suffering, inconvenience, and even future medical care you made need?

Underinsured and Uninsured Motorist coverages is designed to cover your financial losses if the other driver does not have adequate insurance coverage or assets to “make you whole,” – that is, to fully compensate you for injuries caused by another driver.  This coverage is, by default, equal to the amount of liability insurance you cover.  Example: let’s say you buy a car and select $100,000 per person, $300,000 per accident in case you cause a crash when insuring your car.  By default, you also have $100,000/$300,000 of uninsured/underinsured coverage.  Why does this matter?

Imagine you are driving and someone runs a red light.  You are hospitalized for a week, require surgery, miss work, then need a lengthy course of therapy.  If the other driver only has the Maryland state-minimum of $30,000 per person per accident, that probably will not pay for one day at a trauma center.  Since you protected yourself with additional underinsured coverage, after their insurance company pays the $30,000, then you can turn to your own policy.

Until recently, however, the most you could recover from the insurance companies in this example would be a total of $100,000.00  After obtaining the policy limits from the other driver, there was an additional $70,000 because your insurance company gets a credit for the $30,000 from the other driver.  That law quietly changed however, on July 1, 2018, giving you a better option.

You may elect (for a small premium) “enhanced UM/UIM” where you insurance does not get a credit for what you obtain from the at-fault driver.  Using the same example, you would have a recovery of up $130,000.00.  ($100,000 of your own coverage and the $30,000 from the other driver.)  The most critical situation where electing this coverage matters is if you carrier the minimum.  Prior to 2018, if you only carried $30,000, and you obtained the maximum from the driver with the same limits, you could get nothing from your own policy. 

The catch is that you have to actively select this option- many insurers are not even mentioning this option when your policy renews.  The insurance companies were not happy when this law was passed; the cost for UM/UIM coverage is a small fraction of your overall premiums, but provide you with a lot of additional coverage.  This is big risk on every policy they issue, and they have not been publicizing this option.

If you are unsure of your coverage, please call your insurance provider immediately.  If you or a loved one have been in an accident, call our office.  One of our highly skilled personal injury attorneys would be glad to help you review your policy to see if you can better protect yourself while on the road.