A lawsuit that I recently handled reminded me of the importance of informing my clients of how they can protect themselves against drivers who do not have any insurance or have very low policy limits. In New Jersey, as well as many other states, automobile insurance companies are obligated by statute to sell coverage called “underinsured motorist coverage” (typically known as “UIM”) and “uninsured motorist coverage” (typically known as “UM”). Typically, this UM/UIM coverage is sold together and each of these coverages will have the same policy limits. Appropriate policy limits for these types of coverages on your automobile insurance policy should adequately protect you and your family for instances when you are injured by the driver of another vehicle that does not have automobile insurance or does not have have adequate automobile insurance coverage. This article will explain how this coverage works.
When you purchase automobile insurance in the State of New Jersey, the “policy limits” that people generally are concerned with related to bodily injury coverage. That is the coverage that you are purchasing to protect your assets in the event you negligently injure someone in a motor vehicle accident. Unfortunately, for people injured in motor vehicle accident, the minimal bodily injury policy limits allowed by law in the State of New Jersey is $15,000.00 per person, per accident. Unbelievably, there is also coverage available in the State of New Jersey that does not provide for any bodily injury coverage. If you or one of your family members are injured as result of the negligence of an individual that has one of these low limit policies or no insurance coverage at all, the chances are that you will not be properly compensated for your pain and suffering, disability and impairment and loss of enjoyment of life or for out-of-pocket lost wages. Accordingly, UM/UIM coverage is designed to protect you or your family in this instance and you will be monetarily protected up to the policy limit that you choose as opposed to the policy limit chosen by the negligent driver.
For instance, if your automobile insurance policy contains $100,000.00 in UM/UIM coverage and you are involved in a motor vehicle accident with an individual who only has $15,000.00 in bodily injury coverage, you will be able to collect up to $100,000.00 to compensate you for your injuries. In the event your injuries are sufficient enough, you would receive $15,000.00 from the insurance policy for the individual that caused your injuries and the remaining $85,000.00 from your own insurance company under the UM/UIM coverage. Thus, even though you were injured by an individual with minimal insurance, you are able to obtain full compensation for your injuries up to the policy limits that you chose. Clearly, appropriate UM/UIM coverage is important for the protection of you and your family members against uninsured drivers and drivers who are financially irresponsible.
By having lower UM/UIM coverage, you are jeopardizing your family’s ability to obtain appropriate compensation for personal injuries obtained in a motor vehicle accident where the other driver has minimal limits. In my practice, I often see insurance policies that have sufficient and significant bodily injury insurance coverage (for the benefit of people that you may injure in a motor vehicle accident) but have minimal UM/UIM coverage (which would be for the benefit of you and your family). Some insurance agents and brokers will, unknown to you, lower the UM/UIM coverage in order to lower the automobile insurance policy premium. Typically, my clients are not aware of this decrease in coverage until they or a family member suffers injuries at the hands of an uninsured or underinsured driver.
Accordingly, in light of the above, I suggest that you check your automobile insurance policy declaration page for the purpose of making sure that you have appropriate UM/UIM coverage. My suggestion is that you should have the same policy limits for your UM/UIM coverage as you have for bodily injury coverage. If you are not sure of your UM/UIM coverage after looking at your declaration page, my law firm would be happy to review your policy of insurance to determine your policy limits to ensure that your family is protected.