Fewer People Buy It. If they buy it, it probably has lower limits. And even if the owner or the driver bought it, there is no guarantee the coverage applies.
If you have it, here’s how it works. If you’re hit by someone who doesn’t have much or any liability coverage – and believe me, there are a LOT of them – this protects you up to the amount of your limits for the coverage.
So if you have UM/UIM coverage with limits of $100,000, and you are hit by a negligent driver who only has $12,500 of coverage, you can recover up to $12,500 from him, and up to another $87,500 from your own insurance company.
The main difference is that your lawsuit is against your own insurance company, rather than the other driver’s, and you pay the premiums for it.
Let’s look at why it’s different today.
Fewer People Buy it.
Fewer people buy it, because insurance companies no longer have to offer it.
Until 2001, insurance companies had to offer um/uim coverage in an amount equal to the liability limits on any auto liability policy they sold. If they didn’t get you to reject the coverage in writing, then you had it, even if you hadn’t paid any premiums.
I thought the requirement was a good one –a lot of people wound up with um/uim coverage that they wouldn’t have even been offered before.
But it led to some stupid results– because of court decisions, a lot of people wound up with “free” um/uim coverage. The insurance companies didn’t like this, and some of them even stopped writing auto insurance in Ohio – so the legislature passed a new law that said the insurance companies no longer had to offer the coverage.
If The Driver Or Owner Buys UM/UIM Coverage, It’s Less Likely To Apply To The Injured Person.
Before 2001, the UM/UIM coverage that was issued had to extend to anyone driving your car with your permission, and anyone who might be occupying the car, regardless whether they were in your family or not.
So – If you had bought UM/UIM coverage, and your kid was driving someone else’s car, he was covered. If your friend was driving your car with your permission – he was covered.
But when the legislature removed the requirement that insurance companies sell the UM/UIM coverage, the courts held that there was no longer a requirement that the coverage had to be extended to anyone in particular. The insurance companies could now write any exclusions they liked into the policy.
So now, the only way you can be assured that you have um/uim coverage is if you bought the policy and you’re driving your own car. Theoretically, an insurance policy could even exclude coverage for this situation, but – from a publicity standpoint – it wouldn’t go down well.
Even If UM/UIM Coverage Applies, The Limits Are Probably Lower.
This is because of a couple things.
First, the insurance companies won’t sell UM/UIM coverage without selling liability coverage of equal or greater limits. If you have $25,000 in auto liability coverage, you probably can’t buy more than that in um/uim coverage.
Second, the economy and insurance companies are driving people more toward minimum limits liability policies. People need to need to eat. They also need to drive, but less than they need to eat. They need proper insurance, but less than they need to drive.
So you get lots of TV ads from Geico and Safe Auto claiming that they can get you lower rates than anyone else. And that’s what’s most important to people when they are buying insurance.
In Ohio, the minimum auto liability limits on a policy are the lower of $12,500 per person or $25,000 per accident. I am seeing a lot of insurance policies with those limits. None of those have higher limits in um/uim coverage.
I have been a lawyer over 30 years. The most responsible thing you can do is buy insurance with the highest limits you can afford. If you’ve been injured in an accident, talk with an experienced Cincinnati Personal Injury Attorney about the case. Call me, William Strubbe, at 513-621-4775.
Because all situations are different, and because there may be other facts pertaining to your case that I don’t know about, you should not rely on this answer for legal advice. I am not your attorney, and no lawyer client relationship has been formed.