It Wasn’t Your Fault, But Your Insurance Might Still Have a Role – Understanding UM and UIM Insurance in Indiana

It Wasn’t Your Fault, But Your Insurance Might Still Have a Role – Understanding UM and UIM Insurance in Indiana

Why Might I Need UM and UIM Insurance?

If you were injured in an auto accident in Indiana caused by someone else, one of the most important factors in determining how much recovery you can potentially make is the amount of insurance available to you.

While most automobiles on the road have insurance, most drivers cannot pay for damages to an injured person beyond their insurance limits.

In Indiana, drivers are only required to carry $25,000 in liability insurance (the kind of insurance that pays you if somebody else is responsible for your injuries). So if the person who caused your accident only has that minimum policy, that is all their insurer will pay. This does not change even if you take them to trial and get a verdict far in excess of that amount, the liability insurer will still only pay the $25,000.

Most individuals lack personal assets from which you can actually recover, even if you have obtained a judgment against them. As the old adage goes, you cannot get blood from a turnip. If the at-fault party doesn’t have assets, you can’t collect. Further, Federal and State law protect a number of assets, such as retirement accounts, a certain amount of home equity, and primary vehicles, from judgment. This means the Court cannot seize them to satisfy a judgment against the person. The upshot is that you may be able to obtain a judgment against an at-fault party, but actually collecting on it may not be possible beyond the limits of their liability insurance.

How Can I Protect Myself?

That’s where Uninsured Motorist Coverage (often called “UM coverage”) and Underinsured Motorist Coverage (often called “UIM coverage”) come into play. UM and UIM insurance are coverages that you buy from your own auto insurer. They are meant to fill the gap and protect you if other drivers on the road either have no insurance or have inadequate insurance to compensate you for your injuries.

Contrary to some people’s beliefs, filing a UM or UIM claim does not mean you were at fault for the crash. Rather, you make a claim on UM or UIM insurance when somebody else was at fault, but that person had no insurance or not enough insurance to properly compensate you.

What Is UM Insurance?

While Indiana requires all automobiles on the road to be insured, the reality is many drivers shirk this responsibility and drive uninsured. Uninsured motorist coverage is exactly what it sounds like: it steps in to cover you when you are injured in a crash caused by an uninsured driver.

The amount of UM insurance available to you depends entirely on how much UM coverage you purchase with your policy. For example, if your insurance policy includes $50,000 in UM insurance, and the at-fault party has no auto insurance, your own insurance will pay up to $50,000 to compensate you for your injuries. If you are unsure of how much UM insurance you have, you can check the declarations page of your auto insurance.

What Is UIM Insurance?

Underinsured Motorist Coverage steps in when the person who caused the crash has auto insurance, but not enough to fully compensate you for your injuries.

Unfortunately, Indiana’s state minimum for liability insurance is only $25,000 per person. As such, it is all too common for an injured person to have injuries and medical bills significantly higher than the state minimum amount, but with no way to recover from the at-fault party or their insurer beyond that $25,000.

UIM can help make up the difference. As with UM coverage, the amount of UIM available to you will depend entirely on how much UIM coverage you selected and paid for in your policy.

UIM coverage is a little more complicated than UM coverage when it comes to calculating how much your UIM insurer may be on the hook for.

First off, your UIM coverage does not become ripe until you receive an offer for the full amount of liability insurance. Second, Indiana is a set-off state, which means that your UIM insurer is entitled to receive a set-off for the amount that the liability insurer pays on the way to getting you to the policy limits of your UIM policy.

Here’s an example to illustrate this:

Let’s say you pay for $50,000 in UIM coverage.

If the at-fault party has only $25,000 in liability insurance and offers that to you, your UIM insurer would only be on the hook for paying you an additional $25,000.

This is because your UIM policy ensures you have coverage up to $50,000, but you already received $25,000 from the liability insurer.

The UIM insurer, then, is only obligated to pay you $25,000 more to get you to that policy limit.

However, just because Indiana is a set-off state, that does not mean that the UIM insurer is entitled to a set-off for ALL other payments you may receive.

In Indiana, UIM Insurers are not entitled to set-offs for payments by:

• Medical Payments Coverage auto insurers (even if it’s the same insurer that provides UIM coverage)
• Worker’s Compensation insurers
• Certain other UIM insurers

But just because UIM insurers are not entitled to such set-offs, does not mean they won’t try to claim one anyway. Issues involving set-offs are often contentious and can involve litigation. That is why it is essential you have a lawyer on your side who knows how to navigate Indiana’s UIM landscape.

Can I Have More Than One UIM Policy Cover Me?

Yes. Indeed, UIM coverage can also be tricky because there is often more than one applicable UIM insurer for a given accident.

For instance, if you are in a friend’s car and you are injured due to the fault of a third-party (not your friend), you may well be entitled to liability insurance from the at-fault party, as well as UIM coverage from your friend’s policy, and UIM from your own policy.

Determining which UIM insurer is primary can be difficult. Again, having an experienced lawyer on your side is your best bet.

What if I Didn’t Buy UM or UIM Insurance?

Under Indiana law, your insurer must provide you with UM or UIM insurance at state minimum levels unless you have explicitly rejected that coverage. In order to be valid, the rejection must be in writing and must contain certain information.

If the insurer didn’t offer you UM or UIM insurance and/or you did not reject it explicitly as required by State law, the insurer is required to provide it.

Therefore, even if your declarations page does not show UM/UIM coverage, you might still have coverage that applies to you. As before, an Indiana attorney can confirm and enforce your rights.

Because UM/UIM Coverage is From My Insurer, It’s Easy to Collect on, Right?

Not quite, no. When you make a UM or UIM claim, your insurance company becomes adversarial to you. Insurance companies make money by low-balling claims and cutting corners on settlements whenever possible.

Just because it’s your insurance company does not change that. And trying to navigate UM/UIM claims without an attorney can be complicated and require in-depth knowledge of contract law and applicable Indiana case law.

Final Thoughts

If you do not have UM or UIM coverage, please consider buying it, if you can. Having only liability coverage is tantamount to protecting everyone else on the road except you and your family. Every experienced personal injury attorney has had to sit across the table from a severely injured client and explain to them that because the at-fault party had no insurance or very little insurance, they will be getting no recovery or an insufficient one. Purchasing UM and UIM insurance can help protect you and your family from being on the receiving end of that conversation.

About the author: Attorney Hunter McKee

After A Car Accident, Contact A Car Accident Lawyer

If you or a loved one has been in a car accident, you should be focused on getting better, not dealing with insurance details. At Nicolet Law, we offer free consultations and work on a contingency fee basis. That means you have the opportunity to speak with a compassionate, experienced attorney about your car accident, and if Nicolet Law represents your case, you only pay if we secure compensation for you.

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