Preserving Your Right to Collect Under Insured Motorist Coverage

By | April 5, 2017

You and your attorney may believe that your case is worth more than the maximum amount of insurance that the wrongdoer (person at fault for the accident) has. For example, you and your attorney believe that your auto accident claim is worth $200,000 while the other driver only has $100,000 insurance. In this case, you will have to consider other possible sources for collecting the remainder of your claim.

Underinsured Coverage

If you have underinsured motorist coverage, you may be eligible to make a claim against this policy to recover the difference. However, many underinsured motorist coverage policies will require you to give your insurance company the right to sue the wrongdoer and go after his or her personal assets. Nevertheless, the wrongdoer’s insurance company will usually only pay you money from the wrongdoer’s policy in exchange for releasing the wrongdoer from any lawsuit or further liability.

 

Thus, if you release the wrongdoer without getting permission from your underinsured carrier, you might lose the right to collect your underinsured coverage and they may deny you coverage in turn. Therefore, before accepting the limits of the wrongdoer’s policy and releasing him from any further liability, you must first inform your underinsured carrier of your intentions, and they must decide whether it is worth their effort to go after the wrongdoer.

Permission to Settle From Your Insurance Carrier

Usually, they will grant you permission to settle and release the other driver without losing your underinsured coverage, because they figure the other driver does not have much to pursue or that he or she will simply declare bankruptcy if the claim is pursued any further.

 

On the other hand, if your underinsured carrier decides that they want to go after the wrongdoer, they will most often be required to pay you the amount that you would have received from the wrongdoer, and pursue the claim in its entirety themselves. Essentially, they pay you off and then “step into your shoes,” taking on all the risk so to speak, with regard to your claims against the wrongdoer.

 

You might still have an obligation to testify if the insurance company’s claim against the wrongdoer goes to court, but the trial will mainly a function of the insurance company trying to get its money back from the wrongdoer and you will have already received your settlement which will be yours to keep, regardless of what happens their case.

 

Contact An Experienced Car Accident Attorney

This a little-known complication with uninsured/underinsured motorist coverage. Even so, it is extremely important. If you don’t do it right, you may give your own insurance company the right to deny your claim, potentially costing you thousands of dollars in unpaid damages. If you have been injured in a car accident and you have questions concerning your UM/UIM coverage, contact an experienced car accident attorney before accepting any payout on your claim.