What is Uninsured Motorist Coverage?
The following article is the eighth in a series of 9 articles that explains the different concepts involved in insurance policies as they relate to personal injury in automobile accidents. This article focuses on discussing uninsured motorist coverage in automotive insurance policies.
Uninsured Motorist Coverage
In typical automobile accidents, the other party to the accident makes a claim against the insured policy holder. This is called third-party coverage. This coverage involves a claim for bodily injury or property damage to a third-party. This activates the insured policy holder’s coverage for bodily injury or property damage insurance.
First-party coverage provides money to pay for the insurance policy holder’s own bodily injury or property damage. This type of coverage protects an insurance policy holder when they are involved in an accident with someone who does not have insurance (uninsured motorist – UM) or does not have enough insurance (underinsured motorist -UIM).
If the stars were to align perfectly, the driver who was at fault in the accident will have ample coverage in their automobile insurance policy to compensate the victim of the accident for his or her injuries. This is not always the situation faced by victims of automobile accidents.
When the person at fault does not have insurance, the victim’s own automobile policy can be used to cover the damages, provided there is coverage for uninsured motorists. Uninsured motorist coverage operates as a substitute when the person at fault in an accident does not have an automobile insurance policy. The policy holder can present their claims to their own insurance company to be compensated for both economic and non-economic damages.
When to Make an Uninsured Motorist Claim
In general, uninsured motorist coverage applies where:
- there is no bodily injury liability insurance policy, or bond providing equivalent liability protection, in effect at the time of the accident;
- there is an applicable policy, but the insurer or issuer refuses to provide coverage, denies coverage, or is insolvent; or
- the identity of the owner or operator cannot be ascertained and the “bodily injury” of the “insured” is either caused by actual physical contact of such “motor vehicle” with the “insured,” or with a “motor vehicle” occupied by the “insured,” or is independently verified by a disinterested witness.
The Other Driver Has No Insurance:
Unfortunately, not everyone purchases the required automotive insurance and, sometimes, these people slip through the cracks in the system and operate their motor vehicle without having the insurance coverage required by law. In most states, this is a misdemeanor, ticketable offense. However, this is not much help when you have been in an accident where an uninsured motorist is at fault for the wreck. If that driver has some insurance but the limits are less than required by law in the state where the victim resides, that driver may be considered as uninsured under the terms of the victim’s uninsured motorist clause in their own insurance policy.
The Carrier Refuses Coverage or is Insolvent:
In this situation, the driver who is at fault has automobile insurance. However, upon review of the facts of the case, the insurance carrier decided the accident is not covered and issues a declination letter to its policy holder. Or a court may have decided that there is not coverage in a declaratory judgment action.
Another situation where this clause may come into play is when the insurance company has declared bankruptcy or is otherwise insolvent. In this case, the victim can make an uninsured motorist claim against his or her own insurance company.
Note: When an insurance company goes bankrupt or is insolvent, all states have a version of a state guaranty fund based upon the model established by the National Association of Insurance Commissioners. This fund operates much the same way as the FDIC guarantees funds to account holder if a bank goes out of business. The fund set up by the Insurance Commissioners provides limited protection if an insurance company goes bankrupt.
Hit & Run or Phantom Vehicle
This is the most difficult scenario. The first situation is when there has been a collision, but the driver of the at-fault vehicle has fled the scene. The second situation under this scenario is when a “phantom vehicle” caused the accident but did not make impact with the victim’s vehicle. It is important to note that the requirement to make this type of claim under an automobile insurance policy is that the incident usually requires conclusive evidence of a vehicle strike or the wreck was “independently verified by a disinterested witness.” Proof of this verification will be required to be presented at trial or in settlement negotiations.
Insurance company policies typically require the proof of independent verification to ensure another vehicle was actually involved. There have been many documented false claims by unscrupulous policy holders. In some cases, drivers will claim a phantom vehicle caused an accident when the facts show that the driver left the roadway due to their own error and collided with a tree. If a phantom vehicle crossed the center line and caused the driver to swerve into a tree, the uninsured motorist coverage would be effective to cover the damages. However, if the driver simply fell asleep and hit a tree, there is no uninsured motorist damage coverage.
Without an independent verification, the claim will be highly suspicious and could likely have coverage denied.
Who is Insured Under the UM Policy?
Named insureds are listed in the declarations page of the insurance policy. These will always include the policy holder and could also include a spouse, or a family member.
Under the uninsured motorist coverage, bodily injury damages can also be covered for a pedestrian, the owner, driver and passenger of the insured vehicle.
Liability insurance covers the vehicle. Uninsured motorist insurance covers the policy holder. So, liability insurance follows the vehicle and uninsured motorist insurance follows the policy holder.
Is the Insured Entitled to Recover?
An essential element of an uninsured motorist claim is that the insured policy holder must be able to prove conclusively to its own insurance company that the uninsured motorist was responsible for the accident. The policy holder must establish negligence, causation, and damages against the uninsured driver. In these types of claims, the insurance company becomes the uninsured driver and takes the position that it is innocent until proven guilty. The client’s insurance company is saying: “We’re not your friend. We’re now on the side of the uninsured driver. If you want compensation from us, you must prove that this uninsured driver negligently caused your claimed injuries.” Your insurance company is now your adversary (although it can be argued that your own company is always your adversary when making a first party claim against it). Your insurance company has all the available defenses any other motorist could utilize.
Uninsured motorist coverage is one of the most complicated areas of insurance law. These claims almost always require an attorney to navigate. To learn more about how car insurance works in Georgia, click on one of the following links:
- When Can I Recover from Someone’s Else’s Insurance?
- The Declarations Page
- Duty to Defend
- Reservation of Rights
- Bad Faith
- Commercial General Liability
- Direct Actions Against Insurance Companies
- Uninsured Motorists (this article)
- Underinsured Motorists