Being in an accident with an uninsured driver can be extremely difficult. They usually cannot afford to pay the victim’s damages. Accidents involving uninsured drivers remain common in New Jersey, despite the federal government’s mandate that all drivers carry insurance. According to this report, it is estimated that 14.9 percent of New Jersey drivers do not have car insurance.
In any case, it doesn’t necessarily mean getting in an accident with an insured driver would leave you in a better situation. There is a chance that even if the driver at fault is insured, the amount covered cannot fully compensate the victim’s for their injuries and damages. Thanks to uninsured and underinsured motorist coverage, accident victims can still receive compensation even if the driver at fault doesn’t have insurance.
A car insurance policy may also offer to incorporate the standard uninsured and underinsured motorist car insurance with excess coverage in an umbrella insurance policy. Choosing this alternative ensures significantly greater protection against accidents caused by uninsured or underinsured drivers.
Underinsured and uninsured motorist coverage: Why Does It Matter?
In New Jersey, having car insurance is a legal requirement if you own a car. Regrettably, many people seek the least expensive policy they can find to comply with the legal requirements. Many New Jersey drivers are unaware that, in addition to protecting their loved ones from potential accident-related losses, their car insurance policy also covers any damages they may cause.
While a vehicle insurance policy has many different sections, two of which are liability coverage (also known as third-party coverage) and uninsured/underinsured motorist (UM/UIM) coverage (commonly known as first-party coverage). UM/UIM typically covers elements for both property damage and bodily injury.
The required liability coverage in New Jersey is $15,000/$30,000. The liability coverage a policyholder chooses determines how much the insurance provider will spend on third-party medical expenses if the holder causes an accident. No one will receive more than $15,000 from the insurance company for any person hurt in an accident the policyholder causes and a total of $30,000 for injuries to numerous persons.
If the policyholder is involved in an accident with another uninsured motorist, the uninsured/underinsured motorist (UM/UIM) coverage comes into play. When the other driver’s insurance is unavailable or insufficient to satisfy their responsibility to the policyholder, UM and UIM apply. If UM or UIM coverage is available, it will cover the difference between what the other motorist owes and what their insurance will cover.
The UM/UIM coverage is an optional coverage that can be added to a car insurance policy. The amount of UM and UIM coverage that can be added to a standard vehicle insurance policy is up to $250,000 per person and $500,000 per accident.
For example, if a policyholder (who has $250,000 in personal injury protection (PIP) coverage and $250,000 in UM/UIM coverage) is in a car accident with another driver who was at fault, and the former sustains injuries worth $400,000, the policyholder is covered. The negligent driver holds only $10,000 in bodily injury liability insurance.
In this case, the at-fault driver’s bodily injury liability pays $10,000. The policyholder’s PIP pays the first $250,000, and the policyholder’s UIM pays the remaining $140,000 in injuries.
What Is Covered by Uninsured and Underinsured Motorist Policies?
UM and UIM serves as stand-ins for the benefits a policyholder might get from a settlement or jury award. They, therefore, cover all types of losses resulting from an automobile accident injury, not simply medical costs and lost earnings, in contrast to PIP coverage. UM and UIM covers the following items:
· Bills for past and future medical care
· Income lost due to missed work
· Disability
· Distress and suffering
· Lifestyle changes
As was previously indicated, many motorists in New Jersey carry the bare minimum of $15,000 in insurance. However, this bare minimum will not suffice to make you whole again if you are seriously hurt in an accident. Uninsured and Underinsured motorist insurance helps to close the gap.
Frequently Asked Questions
Will my insurance company raise my rates if I file a claim for underinsurance or uninsurance?
Several factors are taken into account by insurance companies when raising rates. You will usually not be charged higher rates if you are suing for UM/UIM as a victim.
How do uninsured and underinsured motorist policies differ from one another?
If you suffer injuries in an accident caused by someone without insurance, your insurer will cover the expenses. They cover up to the maximum amount you choose. An uninsured motorist policy covers you in such a situation. Similarly, underinsured motorist coverage is provided if you are injured by a driver whose liability coverage is less than yours.
Why is it not advisable to select UM/UIM limits higher than your liability limits?
A higher UM/UIM limit is not allowed to prevent some people from providing high levels of coverage while excluding coverage for those who may be injured by their negligence.
Should I file a claim for injuries caused by an uninsured or underinsured motorist?
Afonso and Afonso Law offers a free consultation to accident victims injured by uninsured or underinsured motorists. Our experienced injury lawyers can assess your circumstances and insurance coverage. They can help you determine if filing a UM or UIM claim is your best option for recovering damages. Contact us today at 908-354-9094!
