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The Importance of Underinsured Motorist Coverage

Virginia allows drivers to completely forgo having any insurance, as long as they pay a $500 fee to Virginia’s Uninsured Motorist Fund every year. But is this wise? Most people only think about the price of their insurance, but there’s something else to consider.

If you don’t have underinsured motorist coverage, you could find yourself facing the costs of injuries and property repairs with nowhere to turn to. You need this protection. One accident against an underinsured, or uninsured, motorist will probably pay for the cost of the policy and then some.

Why Spend Your Money on Auto Insurance at All?

You cannot rely on a complete stranger to have good insurance. Even if they are carrying some, it may not be enough to cover the costs of your injuries. This is called being “underinsured.” They could also not have insurance at all, a state known as uninsured.

Yes, auto insurance is expensive, and Virginia does offer an option to avoid buying it. It’s a tempting offer to some. Most auto insurance policies cost more than $500 a year. However, without auto insurance, you’re putting yourself at significant risk if you’re hit by an underinsured or uninsured motorist.

Fortunately, there is still a way to get compensation. If you are carrying insurance, your own insurer can cover the difference between your costs and the insurance coverage of the other driver. This is called underinsured or uninsured motorist coverage.

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Virginia Liability Coverage Limits

In Virginia, the minimum limit for liability coverage for bodily injury in automobile policies is $25,000/$50,000. This means that if you cause a car accident and injure someone, your insurance policy will cover up to $25,000 of their injury claim. It’s a per-person limit. 

The $50,000 means that for any one accident, $50,000 is the most your insurance policy will cover for EVERYONE involved. 

For example, you might accidentally hit another car, and the only person in that car was the driver. If they ended up having medical bills of $25,000, your insurance policy would cover all $25,000. If that driver has medical bills over $25,000, your policy would not cover it. 

In another example, you accidentally hit another car that had three people in it. If each occupant of that car was injured and ends up having medical bills of $25,000, they will have to split the single accident limit of your policy ($50,000) three ways.

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Uninsured (UM) and Underinsured (UIM) Limits

What most people don’t know is that in Virginia, the limits of liability coverage for bodily injury are also the limits for uninsured (UM) and underinsured (UIM) coverage for bodily injury. It’s built into the minimum coverage.

This means that if you choose to purchase extra liability coverage for bodily injury, you are also purchasing extra UM and UIM coverage. UM covers you if you’re hit by an uninsured driver—for example, someone who only pays the DMV Uninsured Motorist Fund fee. 

UIM covers you if someone else injures you and has insurance, but not enough insurance to cover your needs. For example, if you are injured by someone with a minimum-limit $25,000/$50,000 policy and end up having medical bills of $40,000, you’d be left holding the bag on the remaining cost of the bills without UIM.

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UIM Lets You Pursue Two Claims

You are not limited to only pursuing a claim against your insurance or their insurance. If the coverage isn’t enough then you could pursue both. You can pursue the maximum policy amount on the at-fault driver’s insurance, then make up as much of the difference as you can with your UIM coverage.

The insurance companies will argue among themselves about who should cover what, but that isn’t something you’ll need to worry about. Let them worry about how they’ll get their money back!

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The Cost of Not Having Enough Insurance

You should purchase enough bodily injury coverage in your automobile policy to compensate you and your family if you get in an accident with an underinsured driver and become injured. You cannot rely on a complete stranger who negligently crashes into you to have good insurance.

Instead of thinking why you should spend your hard-earned dollars on expensive insurance, since you yourself are a safe driver, you should think, “What if someone with no insurance or a minimum limit policy crashes into me and seriously injures me? What if my spouse is in the car with me? What if each one of our medical bills end up being forty, fifty, or sixty thousand dollars?”

Should you risk being left with astronomical medical bills for treating injuries that someone else negligently caused? No, of course not. But we can’t depend on others to do the right thing and carry enough coverage.

How Much Auto Insurance Coverage Should I Get?

At the time of writing, we recommend at least $100,000 in UIM and UM coverage. $250,000 would be even better if you can afford it. The costs of health care have skyrocketed since the minimum amounts were set, and they’re rarely enough to cover the cost of even minor accidents.

Also, by carrying more coverage, the chances of getting a larger immediate payout from your insurer are higher. You might not have to go to trial to get the compensation you deserve. Check your policy today and see if you’re carrying enough. It could make your next car accident much less stressful.

Does UI and UIM Cover Pain and Suffering?

Yes, if we can argue for it. What an insurer usually does is calculate all the economic damages in a case, then use a multiplier to cover non-economic damages like pain and suffering. With the help of a lawyer, you can maximize this multiplier.

Granted, if you hit your policy maximum, this may be moot unless a trial is warranted. Every case is different. If you’ve been hit by an underinsured motorist, seek immediate legal representation to discuss your options.

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