Underinsured motorist coverage: What you need to know

Rachel N. Woloshin

Author: Rachel N. Woloshin

POST DATE: 2.8.21
Ccha  Personal Injury

Thousands of drivers across the United States operate vehicles on our roads each day without insurance. Thousands more operate their vehicles with minimum liability insurance requirements. In the state of Indiana, drivers are only required to carry automobile liability insurance in the amount of $25,000 per person. That means, if a driver elects $25,000 in liability coverage, that is the most their insurance company will pay to any one person for bodily injury or death caused by the at-fault driver, no matter the amount of damages you suffer. In serious car accidents, there is a good chance that your damages will exceed the at-fault driver’s policy limits, which could leave you with paying for all or a portion of your damages, including medical bills, lost wages, and pain and suffering. This scenario is encountered far too often.

One way to protect yourself from bearing the financial burden of someone else’s negligence is to purchase an ample amount of uninsured and underinsured motorist coverage. Like liability coverage, the Indiana state minimum for underinsured and uninsured motorist coverage is $25,000, but you have the option to purchase higher amounts of coverage. Uninsured and underinsured motorist coverage can pay you the difference between the at-fault driver’s liability coverage (or lack thereof) and your actual damages. For example, if the at-fault driver has $25,000 in liability coverage, but your medical expenses and other damages total $75,000, your underinsured motorist coverage could provide additional compensation of $50,000, if you elected to purchase a higher amount of coverage.

Ccha feb 2021 underinsured blog FINAL

It is important to understand that Indiana law allows your insurance company to reduce your underinsured motorist coverage by the amount the at-fault driver has in liability coverage. In other words, your insurance company gets to take credit off of your underinsured limits for the amount of liability coverage the at-fault driver has, reducing your underinsured motorist coverage.

For example, if the at-fault driver has $25,000 in liability coverage, and you have $100,000 in underinsured motorist coverage, the maximum amount you can recover from your underinsured motorist carrier is $75,000, because it gets to take credit for the $25,000 already paid by the at-fault driver. This is true even if your damages exceed all available coverage amounts, which is why it is important to purchase higher amounts of uninsured and underinsured motorist coverage if you do not want to be left paying for your damages.

There are certain statutory notice requirements that must be met to preserve your right to use your uninsured or underinsured motorist coverage. If you settle with the at-fault driver without consulting an attorney and making sure you have met those statutory requirements, you may waive your right for additional compensation from your own policy.

If you or a loved one are injured in a car or truck accident, the personal injury attorneys at Church Church Hittle + Antrim can preserve your statutory rights, analyze all pertinent insurance policies to determine the amount of coverage available to you, and help you maximize your compensation. Contact CCHA — we are here to be your advocate and so much more.