Virginia law generally requires auto insurance policies issued in Virginia or covering vehicles principally used or garaged in Virginia to offer uninsured (“UM”) and underinsured (“UIM”) motorist insurance as part of the policy. When choosing their insurance, many people may not give much thought to what this insurance is for and how it can protect them in the event of a motor vehicle accident. UM insurance may apply when you are in an auto accident and the other driver has no insurance. UIM insurance may apply when the other driver has some insurance but it is not enough to cover your injuries. Although UM and UIM insurance can be a complicated subject, here is a general overview of what it is and how it works in Virginia. Today we will discuss UM insurance.
What is UM insurance?
Very broadly, UM insurance is insurance that is available when someone gets injured and there is no insurance available to pay for his or her injuries and damages. It is part of the auto insurance protecting the person who is injured, rather than part of the auto insurance protecting the person responsible for the injuries.
UM is uninsured motorist insurance—it applies when someone is entitled to recover damages from the owner or operator of an uninsured vehicle. The vehicle could be uninsured because its owner did not purchase insurance, or because the applicable insurance does not provide coverage, or because the owner and operator are unknown. Accidents in which the owner and operator are unknown may be hit and run accidents, and they can lead to “John Doe” lawsuits. These lawsuits are filed against a fictional person identified as “John Doe,” and in addition to proving the normal parts of a claim for injuries in an auto accident, the plaintiff also must prove that the identity of the driver is unknown.
In Virginia, UM insurance is governed by Virginia Code § 38.2-2206 and the case law interpreting it.
When does it apply?
UM insurance applies when there is no auto liability insurance available for payment of a person’s damage suffered as a result of the ownership, maintenance or use of a motor vehicle. UM insurance applies as soon as the injured person obtains a judgment because there is no liability insurance available for payment. For example, if a person injured in an accident obtains a judgment for $100,000 against a person who has no available insurance or against an unknown “John Doe” driver, the injured person’s UM insurance could potentially apply to the full $100,000 judgment if the UM policy limits are high enough.
How does it work?
If you are injured in a motor vehicle accident, you should inform your own auto insurer as soon as you can. In addition to potentially providing other coverage available in your policy, your insurer may be required to provide UM benefits if there is no liability insurance to pay for your injuries. If an insurer providing UM insurance is given the chance to participate in a lawsuit against the driver causing the accident, then that UM insurer will be bound by the judgment and the amount of the recovery. An insurer issuing UN insurance has an even greater incentive to participate in a “John Doe” lawsuit because there will be nobody else defending the case, and the UM insurer will probably want to make sure that any available defenses are raised.
When a person obtains a judgment for injuries in an auto accident and there is no liability insurance available for payment, UM insurance may apply to pay for some or all of the judgment amount. Also, an insurer providing UM insurance may have incentives to try to settle a claim even before going through a lawsuit all the way to judgment. Getting the UM insurer involved early in the process may help get the claim resolved more quickly and efficiently.
In some situations, more than one auto policy could provide UM insurance. In those cases, the policy covering the vehicle that the injured person was occupying (the “host vehicle”) is first in line for payment. Any other policies also providing UM insurance would then apply after the policy covering the host vehicle. They would share any remaining responsibility for payment pro rata based on the limits of the UM insurance that they issued. There can be several insurers involved, and it often becomes difficult and confusing to navigate through all of their interests and positions when trying to resolve a claim for injuries. Even when liability is clear, the assistance of an attorney experienced with UM insurance may be needed to maximize the recovery and reach an efficient resolution.
How much UM insurance should you have?
The amount of UM insurance that a person should purchase as part of his or her auto insurance policy is an individual decision based upon several factors specific to each person. In general, however, the lowest amount that can be purchased is $25,000 per person and $50,000 per accident for bodily injury , and $20,000 for property damage. The highest amount that can be purchased is an amount equal to the liability insurance limits. The default is that the limits of UM insurance will be the same as the limits of liability insurance unless the policyholder waives those limits and clearly informs the insurer that he or she is choosing lower limits.
Higher UM limits provide more protection. Lower UM limits save money by resulting in lower insurance premiums. Before just checking a box for either the minimum limits or the maximum limits, please give careful consideration to the protection that you need and how much you are willing to pay for it in insurance premiums. You may be willing to risk having the minimum UM limits allowed to save some money, or you may want the full protection of UM limits equal to your liability limits, or you may want to strike a balance to choosing something in between. If you understand how UM insurance can come into play to protect you, then you can make an informed choice that is right for you.