A serious traffic accident is enough of a disruption to life on its own: medical treatment, lost time at work, and a damaged vehicle all require immediate attention. In most cases, the driver who caused the accident will have liability insurance, and the injured party will be covered by that policy for the damages they suffered. However, if the at-fault driver is uninsured, the process of obtaining compensation significantly changes and injured drivers may end up having to rely on their own insurance policy instead of the other driver's.
The Reason an Uninsured At-Fault Driver Changes the Analysis
The purpose of liability insurance is to provide benefits to the other party if the policyholder is determined to be liable for an accident. If the at-fault driver does not have such a policy, there is usually no insurance company behind the at-fault driver to cover a claim. Many uninsured drivers also have little or no personal assets, so it is often impractical to sue the driver and garnish the assets or income: a judgment against an uninsured driver with no assets or income is of little practical benefit. This is why injured drivers usually turn to their own auto insurance policy, in particular to uninsured motorist coverage, as a more viable source of compensation.
Uninsured Motorist Coverage
A type of coverage called uninsured motorist (UM) coverage is required or made available in most states. This coverage is part of the injured driver's own auto insurance policy and is intended to cover the situation where the at-fault driver does not have any liability coverage. The injured driver makes a claim against their own insurance company under the UM clause of their policy, instead of claiming against the at-fault driver's insurance policy, which is nonexistent.
Typically, UM coverage will cover the same types of losses that would have been covered by liability coverage if the at-fault driver had insurance, such as medical costs, lost income, and pain and suffering, up to the limits of the policy. The UM claim process is similar to a third-party liability claim, but the insurer that processes a UM claim is, in effect, acting as the uninsured driver's insurer, and disagreements over the claim's value can occur.
Underinsured Motorist Coverage
Another type of coverage, underinsured motorist (UIM) coverage, covers a different situation: when the at-fault driver has liability insurance, but the policy does not provide enough coverage for the injured party's losses. Once the at-fault driver's liability limits are reached, UIM coverage kicks in, up to the limits of the injured party's own UIM policy. Many states set minimum required limits for both UM and UIM coverage, though these minimums are often modest relative to the cost of treating a serious injury, and policyholders frequently elect to carry higher limits than the state minimum requires.
Personal Injury Protection and Medical Payments Coverage
Many drivers have Personal Injury Protection (PIP) or medical payments coverage, in addition to UM and UIM coverage, depending on the state and the policy. If you have PIP coverage, it will cover your medical costs and a portion of your lost income, even if you were at fault for the accident, up to the limits of your policy. In states with a no-fault insurance system, PIP coverage is typically the first and foremost source of medical expenses and wage loss after an accident, including the ones caused by an uninsured driver, and before any UM claim is filed for damages not covered by PIP, such as pain and suffering.
Coverage for Vehicle Damage
An uninsured at-fault driver also poses the issue of who will pay for repairs to the injured party's vehicle. Collision coverage is an optional coverage that is included in most auto insurance policies and covers damage to the policyholder's vehicle, even if the driver is at fault, including damage from an uninsured driver. Many lenders will insist that drivers have collision coverage if they still have loan or lease payments on their car. If a driver is injured by an uninsured motorist, they may not have a clear path to recover the cost of vehicle repairs if the policy does not include collision coverage, as the UM and UIM coverage generally cover bodily injury rather than property damage, although some policies offer a separate uninsured motorist property damage provision.
The Extent of the Problem
The problem of uninsured driving is a longstanding problem in the country. The national average rate of uninsured drivers has consistently been above ten percent, and there is significant variation from state to state, with some states having uninsured driving rates well below ten percent and others having rates approaching or exceeding one in four drivers. This variation is due to the differences in state insurance requirements, enforcement, and economic conditions, but the underlying risk, that any given collision could involve a driver with no applicable insurance, is present in every state to some degree.
Practical Considerations for Drivers
The only way to avoid the risk of being hit by an uninsured motorist is for most drivers to make sure their policy has enough coverage. When choosing or reviewing an auto insurance policy, it is important to consider the following: Carrying UM and UIM coverage above the state minimum, maintaining collision coverage where a vehicle's value justifies the cost, and understanding how PIP or medical payments coverage works with other coverage. It is a good idea for any driver to check a policy's declarations page to make sure they know exactly what coverage is included in their policy, not just the minimum coverage.
Conclusion
A collision caused by an uninsured driver does not necessarily leave the injured party without recourse, but it does shift the source of compensation from the at-fault driver's insurer to the injured party's own policy. Uninsured motorist coverage, underinsured motorist coverage, Personal Injury protection, and collision coverage each play a distinct role in that shifted framework, and the extent of an individual's protection depends heavily on the specific coverage selected at the time the policy was purchased. Given the complexity of coordinating these coverages and the potential for disputes over claim value, individuals injured by an uninsured driver may benefit from consulting a Personal Injury attorney to evaluate the full scope of available coverage and pursue an appropriate claim.