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A Lawyer's Guide to Purchasing Automobile Insurance - Part Four

Jul 4, 2008
Having already covered issues involved in choosing Liability coverage and First Party coverage, as well as making the Limited Tort or Full Tort election, I now address my last automobile insurance topic dealing with Uninsured and Underinsured Motorist coverage. Since there are countless vehicles traveling the roads every day, with either no liability coverage or minimal liability coverage, it is important for you to consider purchasing substantial Uninsured and Underinsured Motorist coverage.

In the event that you are involved in an accident caused by a driver with little or no insurance, it is likely that you will need to turn to your own automobile insurance policy to get fair compensation for your injuries and damages. In such situations, you are protected if you have purchased Uninsured (UM) and Underinsured Motorist (UIM) coverage.

Uninsured Motorist coverage (UM) provides protection for accidents caused by a driver of a vehicle who has no insurance or who leaves the scene and cannot be located such as a hit-and-run driver. Underinsured Motorist coverage (UIM) provides protection for accidents caused by a driver of a vehicle who has liability insurance but not enough coverage to pay for the damages resulting from the accident, such as medical bills, lost wages and pain and suffering.

In Pennsylvania, all automobile insurance companies must offer both UM and UIM coverage and must obtain signed waivers if UM or UIM coverage is rejected. Since UM/UIM coverage is very important to have to protect you from drivers with little or no liability coverage, it is advisable to carry at least $100,000 of coverage, if not more. In addition to choosing the amount of UM/UIM coverage, you are also given the option to "stack" such coverage if you insure more than one vehicle on your policy. For example, if you "stack" $100,000 of coverage on a policy covering three automobiles, you will have $300,000 of available coverage if you are a victim of an accident involving an Uninsured or Underinsured driver ($100,000 per vehicle x 3 vehicles = $300,000). Because "stacking" coverage is relatively inexpensive, it is often a good idea to consider it for multi-vehicle policies.

In the event that you, or a relative who lives with you, is involved in an accident caused by an uninsured or hit-and-run driver, you are able to seek compensation for your damages (medical bills, lost wages and pain and suffering) from your own UM coverage. Your recovery can be up to the amount of your UM coverage. In addition, if you, or a relative who lives with you, is injured by a driver who does not have enough insurance to cover the damages, you can file a claim for underinsured benefits to make up the difference between the amount of insurance the responsible driver has and the amount of your damages. For example, if the responsible driver has $15,000 of coverage and your damages are $100,000 and you have $100,000 of UIM coverage, you would be paid $15,000 from the other driver's policy and $85,000 from your own UIM coverage.
About the Author
Tim Rayne is the author of numerous publications on Personal Injury Law and is a graduate of the Temple University Beasley School of Law's Master's in Trial Advocacy Program. Tim can be reached at http://www.macelree.com/traynelaw.
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