Many drivers are out there driving around with minimum state limits coverage insurance. This means they are underinsured.
The current minimum state limits are $15,000 per injury and $30,000 per incident. That means if somebody runs a red light causing injury to you, the most their policy will pay is $15,000. The claim is actually against the person, the way our system works is their insurance will pay the bill.
But, many people aren’t solvent enough to justify the cost at time of litigation to pursue them personally. Especially if they don’t have any assets.
The likelihood of seeing anything from that judgment pursued, is not very good. Even if they do have assets, it’s much harder to collect on an individual than to receive proceeds from an insurance policy. Insurance pays out as it is their job and responsibility to. Thus, it is more desirable for the person who caused your injury to have better coverage.
Why underinsured drivers suck
Unfortunately, you don’t get to choose who hit you. And the reality is a lot of people have low coverage. It only takes a couple of doctor visits to amount to a case that’s worth more than $15,000, in terms of what you should be entitled to settlement wise.
That leaves a lot of people short on what the value of their case should be. In that situation, what we can do is collect the entire policy amount, whether it be 15, 30 or 50 or something else.
And if the value of the case is still more than that, then we can make a claim on our client’s under-insured policy.
This is a portion of their own insurance policy that allows their own insurance, to kick in and pay the difference between the full value in the claim and what they received from the under-insured at fault driver.
What an insurance company is willing to pay
Unfortunately, at times there is disagreement between what the victim is entitled to and what the insurance company is willing to pay. If there cannot be an agreement of the value of the case, then you could end up in an arbitration with your own insurance company.
It must be arbitration versus a lawsuit. Your insurance policy will dictate that in the event there’s a dispute it has to be arbitrated.
In that case, an arbitrator will decide how much the insurance company has to pay.
Uninsured is similar in that, it’s a provision on the drivers or the injured parties own policy.
However, this typically comes into play when the driver’s identity is unknown, because there is a legal requirement for state minimum insurance.
Most people do have the state minimum, so it’s usually not technically because someone is uninsured, it’s because they have left the scene of the accident and therefore their identity cannot be ascertained.
If it’s clear that the driver that left the scene caused a crash, meaning there’s a police report for example, indicating as much then you’re likely going to be able to collect on your own uninsured policy. In this case, your insurance company should pay out the value of the claim against that driver as if that driver was there to defend themselves.
The same holds true with respect to, if there cannot be an agreement, then the parties must arbitrate the issue.
What to do if you are in an accident with an underinsured driver
The first thing you should do is consult a knowledgable expert in car accidents and insurance issues. Our team at Bailey Law Firm can help you find your best options and guide you through to a successful outcome.
Call today or book your free consultation here.