Uninsured and Underinsured Car Insurance
Under a standard Massachusetts Auto Insurance Policy Uninsured (UM) and Underinsurance (UIM) Coverage act as personal accident insurance for the named insured and household members, operators and passengers of an insured motor vehicle. These coverages provide benefits if you are involved in a car accident, and the person responsible for the accident has no bodily injury insurance coverage or not enough insurance to cover your damages. It is essential that you obtain sufficient coverage to meet your needs in the event you are injured in an accident caused by an uninsured or underinsured driver.
Uninsured Car Insurance
UM coverage is mandatory in Massachusetts, under Part 3, to limits of $20,000 per person and $40,000 per accident (20/40). This means that if you are involved in an accident with an uninsured or “hit and run” driver, the most you could recover for bodily injury, including medical expenses and lost wages, is $20,000, but if more than one person is injured, all injured persons could not collect more than a total of $40,000.
Underinsured Car Insurance
UIM is optional, under Part 12 of a Massachusetts Auto Policy. Many insurers will provide minimal UIM coverage at no charge even if you do not choose this option because minimum coverage of 20/40 effectively provides no coverage at all. This is because you are only entitled to recover that amount of UIM coverage to the extent that your UIM limits exceed the bodily injury (BI) liability limits of the person who caused the accident. Massachusetts and most states that require insurance impose minimum bodily injury coverage of at least 20/40.
Bodily Injury Recovery and Underinsurance
Any Bodily Injury recovery you do receive is subtracted from the limit available under your UIM coverage such that you can never recover more than the limit of your UIM insurance. For example, if your UIM coverage is 100/300 and the underinsured driver carries a 25/50 policy, after you have recovered the BI limits of $25,000., you can recover under your UIM coverage up to the extent of your damages, but not more than another $75,000.00. Also, you may not purchase more UM or UIM coverage than your optional BI coverage limits on the same policy.
In Massachusetts you cannot stack the limits of UM or UIM coverage. This means that only one applicable UM or UIM coverage will be available to cover the loss, so that it is important that you have enough insurance on each of your vehicles.
Applicable Insurance Policy
The applicable policy, for purposes of UM or UIM coverage will be that on the vehicle the injured person owns, whether they were injured in that vehicle, while operating or a passenger in someone else’s vehicle or as a pedestrian, including on a bike. If you own more than one vehicle, the limits of the vehicle you owned and occupied at the time of the accident will apply, or the limits of the vehicle with the highest limits will apply if you did not occupy a vehicle you owned. If the injured person does not own a vehicle, then the applicable policy will be that of the vehicle of any household member with the highest limits, or, if there are no household policies, then the policy of the vehicle occupied at the time of the accident.
Uninsured and Underinsured Requirements
There are also requirements specific to UM and UIM coverage, such as:
- Timely notice to your insurer of an accident, especially in hit and run situations;
- You must obtain your insurer’s consent to settle with the BI insurance carrier, prior to accepting the BI limits in order to pursue recovery under UIM coverage;
- If you and your insurer cannot reach an agreement on UM or UIM damages, you are entitled to proceed to arbitration before a neutral arbitrator chosen by both you and your insurer.
Call Now For A Free Consultation
If you or a loved one were injured in a car accident, obtain a copy of our Free Report, Some Straight Talk About Insurance Companies and Your Car Accident Claim. In addition, you can contact Attorney Allison now for a free consultation by calling 978-740-9433 or filling out our free consultation form. We look forward to talking to you about your claim.