I know the $25,000 sounds like a lot of money. However, when you consider how much your medical treatment costs. An emergency room stay will frequently cost upwards of $2,000 to $5,000 and can easily cost a great deal more than that. In addition, you may have several months of active doctor and physical therapy treatment. If you must pay these expenses from the settlement, that money gets eaten up rather quickly. Also, if there are more than two people injured in the accident, they must split the policy limits up. So, if there are four or five people injured in the collision, that does not leave a whole lot for any one individual victim.
How can you protect yourself from this problem? The simple answer is part of your own car insurance policy called Uninsured/Underinsured Motorist protection (UM/UIM). The standard protection afforded in any Connecticut auto insurance policy is equal to your liability coverage. Therefore, if you have Connecticut minimum limits of $25,000/$50,000, you will also have that same amount of UM/UIM coverage if you do nothing else.
When does UM/UIM coverage come into play? The UM coverage is activated when the at fault vehicle has no insurance. Your Uninsured Motorist coverage then takes over and acts as if it insured the driver that caused the accident. So, if you are injured by a hit and run driver who is never found or some irresponsible party that never bothered to get the car insured, you have your own insurance to compensate you.
Underinsured Motorist protection is a little bit more complicated. In most situations, you can only use that coverage if you first exhaust the liability coverage (either single person or the entire policy), and then are still not fully made whole. At that point, your Underinsured policy limit is compared with the liability policy limit. If your underinsured motorist policy limit is greater than the liability policy, you can make a claim for up to the difference between what you recovered and your underinsured policy limit. Therefore, if you recovered the entire $25,000 on a Connecticut minimum liability policy and have $50,000 in UIM coverage you could recover up to an additional $25,000 (total $50,000). Please note: if the two policy limits are equal, you were not underinsured and cannot access your policy even if you received less than the full amount of the per person limit because there were more than 2 claimants.
For example: 4 people were injured in an accident where the liability policy was $25,000/$50,000. The injuries were all similar and if there were no insurance limits, they would all be worth about $20,000 each. All parties take $12,500, an even 4-way split. The liability policy is exhausted. The parties each have about $7,500 in uncompensated damages. However, if the underinsured motorist policy was also the state minimum, you have the same limits and the victims are not underinsured by the policy definition, even though every party only received half of the available limits of either policy. Effectively, if you have minimum policy limits, you have Uninsured Motorist coverage, but no Underinsured Motorist coverage (Unless the liability policy is from another state with lower than Connecticut liability policy limits).
How can you help protect yourself from inadequate coverage from the person who injured you? There are 3 ways.
- Increase your Liability coverage. This is the simplest way, if you can afford it. Your UM/UIM limits are normally equal to your liability coverage, so increasing liability insurance will have the additional effect of increasing the UM/UIM protection. Since so many people carry minimum limits, anything above $25,000/$50,000 should afford you additional protection for your own and your passengers’ injuries and will also protect any of your personal assets should you be in an accident and be found to be at fault.
- Buy Conversion coverage: Conversion coverage only has value in the case where you require Underinsured Motorist protection. This type of coverage requires the exhaustion of the liability coverage (either single person or the entire policy), and then the claimant must still not be fully made whole. However, it does not compare your Underinsured limits to the limits of the liability policy. Your policy limits are just added on and are fully accessible. Therefore, it does not matter if the liability policy is $25,000 or $250,000. You still get to add on your personal Underinsured limit to the total insurance available. Please note that while this gives you greater Underinsured Motorist coverage, it has zero effect as to your coverage in an Uninsured Motorist situation. It is also very expensive, given its limited use.
- Increase your Uninsured/Underinsured coverage only: Connecticut law allows you to purchase up to double your liability limits in UM/UIM insurance. This means if you had a minimum liability policy of $25,000/$50,000, you could purchase up to $50,000/$100,000 UM/UIM coverage. In all ways, it operates like the UM/UIM insurance you receive as part of the standard Connecticut Auto policy. Of the 3 types of adding additional UM/UIM insurance, this is usually the least expensive.
UM/UIM insurance is the one way you can assist in protecting yourself and your loved ones from catastrophic injuries. You should not depend on the level of responsibility of the person who has negligently caused your injury, who has already proven themselves to be less than dependable. You should take the initiative and safeguard the people you care for.