What is Underinsured Motorist Insurance?
When you bought your insurance policy, in addition to PIP and liability coverage, you also got underinsured motorist insurance (UIM). If someone else hits you and causes $150,000 worth of injuries, but only has $25,000 worth of insurance, UIM will make up the difference, but only if you have UIM policy limits of $150,000 or more. In Oregon, however, you are only required to have $25,000 of UIM coverage so most people only have the minimum.
UIM also includes coverage if you are hit by someone with no insurance at all. This is called “uninsured motorist” coverage, or UM but we will group it with UIM for now.
If you have been hit by someone who does not have enough insurance to cover your injuries, you have three options.
- You can take the policy limit amount from the other driver’s insurance ($25,000 in the above example). Plenty of people and lawyers do that because it is a quick and easy solution.
- You can try to collect money directly from the person who hit you. If the person is rich, this may be a good way to go. But it is very difficult and expensive to collect money form most people. Even if you can get a judgment fromm the court against them, it can be expensive and time-consuming to garnish wages and attach bank accounts.
- Collect the $25,000 form the insurance company of the person who hit you, and then collect the rest from your own UIM coverage. This option is by far the best.
There is a catch though. You have to have paid for this coverage. Your UIM will only pay that additional $125,000 if you have paid $150,000 or more of UIM coverage. You will also have to prove that your injuries are worth more than the $25,000 you have already been given. If you lawyer has already gotten your policy limits, however, much of the legwork has already been completed to establish a UIM claim.
If you have already been in a collision, it is too late to buy more UIM for that collision.
But if you have not already been in a crash, or if you have been in a crash but you want to be better prepared in case you get into another one, you should purchase more UIM coverage. This coverage is cheaper than you might think. Rates vary but the extra payment every six months can be very reasonable and worth it.
If you do not have at least $250,000 of UIM, talk to your insurance agent to find out what it would cost you to get to that spot.