Deciphering Your Auto Insurance Policy: What is UM and UIM?

Let’s start with a hypothetical.  Assume Shirley is driving her car down a Seattle residential road and comes to a four-way stop.  She stops her car.  She looks right.  No cars.  She looks left. She views one car approaching the intersection, driven by Joe, but the car is about 20 yards away from its own stop sign.

Shirley continues forward assuming that Joe will stop his vehicle.  She gets half-way through the intersection before Joe strikes the left rear side of her auto.  Joe was obviously negligent because he failed to stop at a stop sign.  At the scene of the accident, Shirley learns that Joe is uninsured (Shirley carries a standard auto liability policy).

Shirley later suffers minor neck injuries from the collision and requires physical therapy.  Since Joe is without insurance can Shirley get reimbursed for her physical therapy bills by her own insurer?  The answer is…maybe.

Mandatory Motor Vehicle Liability Insurance

Washington State law mandates that all drivers carry motor vehicle liability insurance of not less than $25,000.  This insurance covers damages that an insured causes to another driver on account of the insured’s negligence.  In our hypothetical, if Joe followed the law and carried a sufficient auto liability policy, this policy would cover the cost of Shirley’s physical therapy.

Unfortunately, however, Joe is not alone.  Despite strict penalties for the uninsured motorist, thousands of drivers in Washington operate a vehicle, every single day, with no liability insurance.  Is there any hope for Shirley, or does she simply have to pay for her therapy out of her own pocket?

UM and UIM to the Rescue

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Uninsured Motorist insurance (UM) and Underinsured Motorist insurance (UIM) are essentially liability policies that a driver can select to help manage the risk if he gets hit by a driver without, or with very minimal, insurance.  UM provides compensation to an insured when he is injured by a driver without liability insurance.  UIM provides compensation to an insured when he is injured by a driver whose liability insurance is insufficient to provide full compensation for the injuries.

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Both UM and UIM policies act as insurance for the adverse driver with no or minimal insurance coverage.  If an insured selects a UM or UIM policy, he will be able to make a claim against his own insurance company for the negligent conduct of an uninsured, or underinsured, driver.  An easy way to think of this is to simply note that your own UM and UIM policies will become the policies of the adverse driver, and you will be able to make a claim against your own insurance company as if they were the insurance company for the adverse driver.

UM and UIM not Required by Law

While Washington law requires all insurance companies to offer UM and UIM coverage to their insureds, Washington law does not require that an insured accept this offer.  That is, Washington drivers are free to reject both UM and UIM coverage if they believe such a rejection is in their best interests.  If they do, then these drivers must express their rejection, in writing, to their specific carrier.

Keep in mind that if a driver rejects UM/UIM coverage, there is a real risk that he will go without sufficient financial resources if struck by a negligent driver that carries no liability insurance whatsoever.  This is why our firm typically advises to carry UM/UIM coverage.  The expense is not that great, but the peace of mind and security can be insurmountable.

Joe, Shirley and Physical Therapy Expenses

If we return to our hypothetical, Shirley will have to pay for her physical therapy expenses out of her own pocket since Joe failed to carry liability insurance.  However, if Shirley opted for UM/UIM coverage with her carrier, prior to her accident with Joe, then this coverage will definitely compensate Shirley for her therapy expenses.  See, an insurance hypothetical can be fun!

Of course, the Phillips Law Firm understands that “insurance” and “fun” are often not found in the same sentence.  Although difficult to make matters fun, we undoubtedly know that we can make insurance issues easier to understand.  If you have questions about your own auto liability policy, contact us.  If your were recently involved in an auto accident where the at-fault driver had little or no liability insurance, contact us as well.  Our experienced and dedicated team of attorneys is ready to assist with your questions and case.

Real People. Real Justice. (800) 708-6000