Underinsured Drivers: Are you Covered in Case of an Accident?

Posted by Allison Sullivan on May 5, 2016 8:52:41 AM

Underinsured driver Automobile AccidentSouth Carolina's rate of uninsured drivers has been steadily improving since the early 2000's. It can be comforting to look at an uninsured-motorist rate of only about 8% and think that most collisions that take place will involve liability insurance coverage on the at-fault vehicle. 

Unfortunately, while the rate of uninsured drivers is low, the rate of underinsured drivers remains shockingly high. What does this mean for you in case of an automobile accident, wreck involving a semi/tractor trailer, or motorcycle wreck? Let's take a closer look and find out.

What Is an Underinsured Driver?

A totally uninsured driver would be a motorist operating a vehicle on the road that is carrying no valid insurance policy for themselves or their registered vehicle. To be road-legal, of course, drivers in South Carolina are required to carry a valid insurance policy of at least $25,000 on their vehicles or face penalties and even the loss of their license if they choose not to.  If an at-fault motorist does not have any liability coverage, then the Uninsured Motorist (UM) coverage on the vehicle not at fault would provide insurance coverage for the party not at fault. This type of Uninsured Motorist (UM) coverage is required by law and must provide at least $25,000 in coverage.

An underinsured driver, on the other hand, has at least the $25,000 minimum liability coverage, but the amount of liability insurance coverage is not enough to compensate the injured party.  In those cases, if the injured party sustains damages beyond the amount of liability coverage the at-fault has, then the injured party's Underinsured Motorist (UIM) coverage would kick in.  Underinsured Motorist (UIM) coverage is NOT required by state law and is an entirely optional policy.   

If you're involved in serious car wreck, you may be shocked at how quickly your medical bills and lost wages can pile up. A good example is this: say that you are in a car wreck with a driver who only has a liability policy of $25,000, and the damage from the collision of your vehicles leaves you with $75,000 of medical costs incurred. Your recovery is limited to $25,000, and you could get no additional recovery unless you have can file a claim with your own insurance policy under the underinsured driver coverage to attempt to recoup those costs and obtain recovery for your injuries.

What Should You Do If The Other Driver is Underinsured?

You'll need to act as quickly as you reasonably can.

While in some cases it will be obvious early on that the other driver's insurance policy won't cover costs incurred, in other cases you may have no idea the policy isn't enough until you're looking at astronomical medical bills that exceed even generally reasonable coverage limits. The minute you become aware that the at-fault driver's policy will not cover the costs the car wreck has caused you, you need to call your insurance company to start a claim.

Don't wait! It's imperative that you are clearly making every attempt you can to recoup costs in a quickly and timely manner. Many policies include a limit on the time a policyholder has to inform the insurance company. In some cases, this time limit may be as short as 30 days. Make sure you give your insurance company a call and ask them to break down your uninsured/underinsured driver policy so you know exactly what kind of time you have.

Your Coverage Has Limits, Too

We have spoken with countless people over the years who are certain they have purchased the optional Underinsured Motorist (UIM) coverage because "full coverage" was requested from the insurance company.  Insurance companies do not offer a "full coverage" insurance policy and some use that term to refer to "comprehensive" coverage for vehicles which covers property damage in the event of vandalism or weather events.  "Full coverage" almost never refers to additional coverage for uninsured or underinsured drivers.

South Carolina motorists can only purchase additional uninsured insurance or optional underinsured motorist coverage up to the amount of liability coverage the motorist carries.  In other words, if a motorist decides to only purchase the minimum liability policy of $25,000, the motorist can purchase underinsured motorist coverage of $100,000.  That level of underinsured motorist coverage can only be purchased if the motorist also purchases a $100,000 liability policy.  

The good news is that optional underinsured and additional excess uninsured driver insurance tends to be inexpensive, and we recommend that motorists purchase as much of those coverages as the motorist can afford given how quickly medical bills and lost wages can pile up in even a moderate car wreck.  Make sure you speak with your insurance carrier about policy limits to ensure you have the best protection for you and your family.

What to Do If Insurance Won't Pay

If you've been in a car wreck with an underinsured driver and have done your due diligence — processed all claims in a timely manner, spoken with insurance and claims agents, provided documentation upon request, and made clear your needs and how they should be covered under your existing policy — and have been rewarded with an insurance company that refuses to pay out, drags its feet, creates bureaucratic hurdles you can't possibly overcome, your insurance company may be acting in bad faith.  If so, please schedule a consultation with a legal representative to discuss whether or not you may need to take further action to receive what you are owed as written in your insurance policy.

That's Where We Come In.

Whether you're looking for legal representation in a court of law or just need some advice on your situation and what the next step may be, Bluestein Attorneys is here to help. South Carolina's laws on car insurance can be a little confusing, and we'd be happy to sit down with you and take a look at the specifics of your situation. Reach us by phone at (803) 779-7599 or contact us online just by clicking the banner below.

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Topics: Insurance, Automobile Accident