The following is a real life example from Certified Civil Trial Attorney, David Sinderbrand.

The hospital room is filled with John’s family and friends as I walk in. There he lay, 19 years old with his left arm severely broken in 3 places after getting hit head-on the night before. After undergoing emergency surgery within hours to place hardware to stabilize the breaks, John now lay in the hospital bed, woozy with pain medication while his family has many questions.

I discuss with John’s mom the fact that her automobile insurance policy will pay up to $250,000 in medical bills for crash related treatment pursuant to her No-Fault coverage, also known as Personal Injury Protection (PIP). His mother is relieved that her son’s medical bills will be paid but she has the mistaken belief that such a high PIP limit means she must have “full coverageâ€.

I explain that a liability claim against the negligent driver’s insurance company will be presented immediately and that the liability limits of the negligent driver’s insurance policy will determine the maximum amount of money able to be recovered from that insurance company. I inform that, if the negligent driver has inadequate insurance (aka: minimum $15,000 policy limit), then we have the ability to pursue mom’s own insurance company in order to seek Underinsured Motorist benefits (UIM) to the extent of the UIM coverage she purchased. After addressing all the family’s questions, I conclude by discussing the “Nightmare Scenario†in which the negligent driver has $15,000 in liability coverage and mom has only $15,000 in UIM coverage, effectively meaning there is no UIM coverage available.

I look at the long faces in the room and realize John’s family understands the import of my words. For an injury that is likely worth a significant 6 figure amount, they see the potential for a relatively minor financial recovery. We all hope that situation does not occur.

The next day, John’s mom checked her insurance policy declaration sheet and discovered the worst possible news – she had only purchased the minimum $15,000 in UIM coverage. By the end of that day, the insurance adjuster from the negligent driver’s company delivered the final bit of news to complete the Nightmare Scenario. The negligent driver had only $15,000 in liability coverage.

John’s recovery would be limited to $15,000, an insignificant amount in light of John’s horrific injuries. The “Nightmare Scenarioâ€.

Your UIM coverage insures you and your family if the person who hit you has low liability policy limits. Your liability coverage insures you against claims from others you may injure as a result of your negligence with your car. You and your family deserve coverage limits (UIM) that are at least equal to or greater than the amount for which you are insuring strangers.

Read more here >>