A client called me a couple of weeks ago. He’d been rear-ended by another person who said he had car insurance, but he didn’t. Their car insurance had been cancelled due to non-payment which meant my client had to file a car insurance claim on his policy where someone else was clearly at fault. This type of claim is referred to as an uninsured motorist claim.
Uninsured motorist / under insured motorist (UM/UIM) coverage is optional coverage on Texas car insurance policies and is designed to protect the insured when someone without car or motorcycle insurance hits them. In essence, it means the person with this coverage is insuring themselves against someone else’s refusal to have insurance.
There are two parts to UM/UIM coverage; bodily injury and property damage coverage. Bodily injury is the medical portion and is designed to pay for medical care for the policy holder and anyone riding in the vehicle with them at the time of the accident. The property damage portion pays for all needed repairs to the policy holder’s vehicle or if the car is totaled it pays the depreciated value of the insured’s vehicle.
Uninsured motorist limits coverage can be purchased as split limits (50/100/50) or in a combined single limits ($300,000, $500,000, etc.). In the case where a person purchases split limits such as 50/100/50, the first number is the maximum limit for medical coverage any one person will receive. The second number represents the maximum amount the policy will pay for medical care for everyone injured in the vehicle if more than one person in the car, however no one will receive more reimbursement than the first number. The third and final number represents the amount of property damage coverage and should be at least equal to the value of the most expensive on the policy.
Texas car insurance policy holders are rewarded for carrying UM/UIM coverage as the policy deductible is $250 per state law. If a policy holder decides to not carry uninsured motorist coverage, then their claim would be covered by the liability coverage on the policy, provided they had a collision deductible. If that’s the case, the deductible paid out of pocket would be whatever the policy’s collision deductible is such as $250, $500, $1,000, etc.
If you can’t live without your car while it’s being repaired, then the policy holder also needs to have rental car reimbursement coverage on the policy. Without that then the policy holder would have to pay to rent a car or truck out of their pocket making an already frustrating situation even more maddening.
No one wants to be involved in an accident even when it’s the other person’s fault. My client has uninsured motorist coverage, however, he was still frustrated with having to pay the $250 deductible. The good news is that’s still half of what his collision deductible is. While he has rental car reimbursement on his policy, he needed a higher limit to cover the size of vehicle he drives, a full size pickup truck. Some carriers allow this to be increased when this is determined to not be enough, but the bottom line is he’s simply frustrated by paying anything out of pocket or from his policy when the other person should have had an active policy in force. I would be too!
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