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The Importance of UnderInsured Motorist Coverage

by Ilya Rabkin, Trial Attorney for the Pendleton Law Team

Insurance, and how much coverage you have is not something people typically think about. When shopping for automobile insurance, most drivers in Virginia are mainly thinking about one thing, “how much is this going to cost me?” Indeed, purchasing automobile insurance is often viewed as a nuisance, “why should I spend my hard earned dollars on expensive insurance, I’m a safe driver, I’m never going to cause an accident,” is usually the second thought that goes through people’s minds when shopping for auto insurance. Virginia even allows drivers to completely forego having any insurance, as long as they pay a $500 fee to Virginia’s Uninsured Motorist fund every year.

Why Spend Your Money on Insurance?

Those two thoughts are completely understandable, why would you think about automobile insurance and how much coverage you have and why should you have to spend your hard earned dollars on purchasing insurance? The answer to the first question is simple, people don’t think about insurance and how much coverage they have until something bad happens that is, but by then it’s already too late to do anything about the policy they have. The answer to the second question is a bit more complicated but can actually be summed up in just one sentence. You cannot rely on a complete stranger to have good insurance.

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, if you accidentally hit another car and the only person in that car was the driver, if he or she ends up having medical bills of $25,000, your insurance policy would cover all $25,000. If the driver of that car has medical bills over $25,000, your policy would not cover it. Now if you accidentally hit another car and besides the driver, two passengers are also in the car; if each occupant of that car ends up having medical bills of $25,000, they will have to split $50,000, the single accident limit of your policy, three ways.

Uninsured (UM) and Underinsured (UIM) Limits

That is a relatively simple concept, but what most people don’t know is that in Virginia, the limits of the liability coverage for bodily injury is also the limits for uninsured (UM) and underinsured (UIM) coverage for bodily injury. That means that every automobile insurance policy in Virginia, already has the premium for uninsured and underinsured motorist coverage built into it. Which means that if you choose to purchase extra liability coverage for bodily injury, you are also purchasing extra UM and UIM coverage. UM and UIM coverage are extremely important. UM covers you if someone without insurance injures you, for example, a person that chooses not to buy insurance at all and only pays the DMV fee mentioned earlier. UIM covers you if someone else injures you and does have insurance, but not enough insurance, 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.

The Cost of Not Having Enough 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? You should also think about the person who negligently crashes into you, should you really hope and pray that this person has insurance or has enough insurance to compensate you for your injuries? Should you risk being left with astronomical medical bills for treating injuries that someone else negligently caused? No, of course not. You should purchase enough bodily injury coverage in your automobile policy to compensate you and your family if someone without insurance or without enough insurance injures you because, you cannot rely on a complete stranger, who negligently crashes into you, to have good insurance.