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Un-Insured/Under-Insured Motorist Coverage – What Is It And How And When Will You Need It!

Posted on: June 17, 2014

Everyone knows that before the DMV in Maryland will give you tags for your motor vehicle you must prove that you have valid insurance on that vehicle. Some simply want the least expensive insurance coverage that the State of Maryland demands that you have in order to register a vehicle in this state. If the minimum coverage is selected by the owner of the car, the coverage in the State presently will provide you with a policy which carries a liability limit of 30/60/10. This coverage is called “split limits” coverage. Very few policies that carry a “single” limit benefit. For the purposes of this discussion, we will explain split limits and how it may benefit you in the event you are in an accident.

30/60/15 – This means that in the event you are in an accident your insurance company will pay no more than $30,000.00 to any one individual for bodily injury claim submitted and $60,000.00 to any and all people injured.  So if five people are injured by you and the accident is deemed to be your fault or the operator of your vehicle’s fault, then the most your carrier will pay out to all five is $60,000.00.  But no one can receive more than $30,000.00.   The $15,000 figure coverage covers the PROPERTY DAMAGE that you or the driver of your car causes due to an accident deemed to be your fault.  So when you lend your vehicle out to someone in Maryland, understand that insurance in Maryland “follows the car” not the “person”.  However, if you or the driver you lend your car out to totals a new Mercedes Benz, it is the driver’s responsibility to pay the short-fall.

If you have MAIF, the state’s coverage offered primarily to those owners and drivers that cannot find a private insurance company to underwrite the coverage the most coverage offered is the minimum 30/60/15.  (these limits were recently raised in the past year from 25/50/10)

If you do have insurance with a private insurance insurance company, i.e. State Farm, Nationwide, Allstate etc. then you are able to select HIGHER LIMITS to not only protect you against being sued for more money than your policy will pay in the event you cause an accident which results in claims valued at more than the limits contracted for in your policy with your carrier.  The higher the limits, the more you are protected. 

The same goes for Un-Insured Motorist coverage, which also operates as Under-Insured Motorist coverage.  Should you be driving and another driver causes an accident and flees the scene and there is NO conflict as to what happened, your Un-Insured Motorist policy and coverage steps in to protect to you to the extent of that coverage.  This is called a “phantom driver” accident.  Un-Insured/Under-Insured Motorist coverage is extended as a benefit up to the limits of coverage ONLY IF the fleeing driver was 100% at fault.  (Maryland is a Contributory Negligence state).

Un-Insured Motorist coverage is also extended by YOUR company should the accident be caused by someone else and that person for whatever reason HAS NO COVERAGE ON THE VEHICLE THEY ARE DRIVING.  They may not have paid their premium and the insurance coverage that had been on the car lapsed.  YOU ARE STILL PROTECTED BY YOUR OWN INSURANCE POLICY.

To what extent am I protected in this case?   If you select limits of 50/100/50 with your carrier, your company will pay up to $50,000.00 to repair your vehicle.  The deductible applied to such a claim is normally approximately $200.00 to $250.00.  This differs from the deductible applied to your “collision” coverage which can run up to $1,000.00.  It is very important in these cases to get the correct coverage to apply because using your collision insurance can result in you being “charged” for the accident, thereby subjecting you to a rise in your premium or cancellation of your policy.  This is why is it very important to contact an attorney to insure the correct coverage are being utilized in these cases.

What is Under-Insured Motorist coverage? 

All policies written in the state of Maryland must have Un-Insured/Under-Insured Motorist coverage limits that MATCH what you chose as LIABILITY limits.  The only exclusion is that you as the owner and insured selects NOT TO HAVE THEM MATCHING AND SIGNS A WAIVER, selecting UM coverage of a lesser amount.  Without the signed waiver, the limits MATCH.

In the event you are involved in an accident and injured by another driver with LESS coverage than you, and the value of your bodily injury claim exceeds the coverage limit of the at-fault driver’s policy, you would have the benefit of the difference between the coverage of that driver and your policy.  The same applies to UM/UIM/P/D.   For example, a MAIF driver causes the accident and you are injured.  Your car is a 2006- $45,000 Mercedes Benz and it is totaled.  MAIF tenders its limit of $15,000.00 to fix your car.  Your company kicks in another $30,000 under UM/PD to pay for the total loss and the deductible associated with your coverage is applied. You are nearly fully compensated for your total loss of your car.  But if you have only 30/60/15 you are out of luck.

The same applies to your bodily injury claim. Should your claim have a value of more than $30,000.00, your company in this case, would kick in up to another $20,000.00.  (Total amount available to pay for your bodily injury claim is $50,000.00).  The law is whatever you have in UM coverage is compared to that of the at-fault driver’s policy.  If you have more than the liability coverage afforded then you have the right to assert a claim for the “excess” or difference of that policy and your own.   Should the at fault driver have 50/100/50 your company will pay nothing on the UM/UIM claim.

Most policies in the State of Maryland carry liability and UM of 50/100 or 100/300.

Another point to remember is that Un-Insured Motorist coverage “follows” you and your household residents/family to protect you in the event you are involved in an accident involving any motor vehicle whether you or your family be injured while riding  a bike when injured, in a taxicab, on a bus, etc..  It is a very important coverage and one all should understand its benefits and when it applies to the loss.

There is more to Un-Insured/Under-Insured Motorist coverage than this article addresses and an experienced attorney will be able to guide you thru the process of filing a claim under all of the appropriate coverage and policies that are available to compensate you after an accident involving a motor vehicle.