What Is Uninsured Motorist Coverage (UM/UIM)?
If you’ve ever asked, “What is uninsured motorist coverage?” you’re not alone. Often abbreviated as UM/UIM, uninsured/underinsured motorist coverage includes 2 distinct components:
- Uninsured motorist (UM) coverage applies when the at-fault driver has no liability insurance or didn’t stop to provide their insurance information.
- Underinsured motorist (UIM) coverage applies when the at-fault driver has liability insurance but not enough to fully compensate you for your injuries and losses.
In Michigan, UM/UIM coverage is optional. While it can be tempting to skip this endorsement to save money, it provides valuable benefits. UM/UIM insurance may cover pain and suffering (if you meet the severe injury threshold) and certain out-of-pocket expenses that aren’t available through your regular PIP insurance, which covers medical bills and lost wages primarily.
Why Do You Need UM/UIM Coverage in Michigan?
Michigan’s no-fault reform allows drivers to select tiered PIP coverage limits, starting at $250,000 (or $50,000 for those on Medicare/Medicaid). If you choose a lower PIP limit and suffer serious injuries, your medical expenses could exceed your coverage and leave you with unmet expenses. Once your benefits are exhausted, the next step is to file a third-party claim through the at-fault driver’s liability insurance or file a lawsuit in civil court. Data on uninsured/underinsured motorists in Michigan show why this coverage is so important.
- Michigan is among the most expensive states for auto insurance. Experian reports average annual premiums over $2,800 for basic coverage.
- Due in part to the high cost of auto insurance, more than 1 in 5 Michigan drivers is uninsured according to data from the Insurance Research Council, which is among the highest rates in the nation.
- Many more drivers may lack the full coverage needed to pay their own medical bills and cover others’ injuries in the event of a severe accident.
What Does UM/UIM Coverage Pay For?
UM/UIM coverage provides an additional layer of protection that steps in when the at-fault driver’s policy falls short. It gives you a faster and more predictable alternative to suing the at-fault driver personally. Uninsured and underinsured motorist coverage may provide compensation for:
- Pain and suffering
- Excess medical bills
- Lost wages not covered by no-fault benefits
- Wrongful death damages in fatal accidents
It’s important to note that UM/UIM insurance in Michigan provides compensation for bodily injuries and lost wages, not property damage. Vehicle repair costs should be covered by your collision insurance.
However, the state has a mini-tort law that lets you sue an insured driver for up to $3,000 in out-of-pocket repair costs, including your deductible. If the driver is uninsured, you may try to sue for the full value of your vehicle. Additionally, if you choose broad-form collision rather than basic (standard) collision, the insurance company may cover your deductible if you aren’t at fault for the accident.
How UM/UIM Coverage Works in Michigan
After an auto accident, several types of coverage may apply before your UM/UIM policy kicks in:
- Your first step is to file a first-party claim for no-fault PIP benefits through your own insurance to cover your medical bills.
- If your bills exceed the limits of your PIP policy, you can file a third-party claim through the at-fault driver’s liability insurance.
- Motorists in Michigan may carry “standard” residual liability insurance of $250,000 per person and $500,000 per accident. However, drivers can opt-down to lower limits of $50,000 per person and $100,000 per accident, which may not be enough.
If the driver’s liability insurance doesn’t cover your expenses, you would normally have to file a lawsuit to recover these costs, while accepting the fact that the driver may not have the resources needed to satisfy the judgment. UM/UIM coverage lets you seek compensation for these expenses through your own insurance company rather than the at-fault driver, which is typically more straightforward.
What if I Don’t Have Uninsured Motorist Coverage?
If you chose not to purchase UM/UIM coverage, your options may be limited after a severe accident or wreck with a hit-and-run driver. While your PIP coverage should pay for medical bills up to your chosen policy limit, it can be more difficult to recover compensation for:
- Pain and suffering
- Long-term disability
- Permanent disfigurement
- Wrongful death
- Damages above the at-fault driver’s policy limit
When renewing your auto insurance, carefully review your policy to understand what protections you have. Read the fine print, and ask your agent to explain any terms that you don’t understand. If you’ve been involved in an accident with an uninsured driver and are unsure about your rights, speak with an attorney to clarify your next steps.
Can a Lawyer Help With an Uninsured or Underinsured Claim?
Absolutely, legal guidance can help you resolve your claim faster while helping ensure you’re fully compensated for all expenses. Although you’re technically going through your own insurance company, uninsured and underinsured motorist claims are often more complex than they first appear. Legal guidance is especially important in situations involving:
- Hit-and-run accidents
- Drivers with no insurance
- Drivers who carry only Michigan’s minimum liability coverage
- Disputes over fault or the severity of injuries
- Insurance company denials or low settlement offers
Even though you are filing a claim under your own UM/UIM policy, your insurer may still challenge your claim. Your insurer may investigate the crash, question liability, minimize your damages, or dispute whether your injuries meet Michigan’s serious impairment threshold needed to recover compensation for pain and suffering. An experienced Michigan car accident attorney can help by:
- Conducting a thorough investigation of the crash
- Gathering medical records and expert opinions to support your injuries
- Identifying all available sources of insurance coverage
- Negotiating aggressively with insurance adjusters
- Ensuring all policy requirements and deadlines are met
- Protecting your right to pursue full compensation
Important: If you reach a partial settlement with the at-fault driver but anticipate using your uninsured/underinsured motorists coverage, your UM/UIM insurance provider must typically approve the settlement before you accept it.
Failing to obtain consent could jeopardize your ability to recover additional compensation under your own policy. Because UM/UIM claims involve strict procedural rules and stringent oversight, having an attorney on your side can help you avoid costly mistakes.
Should I Hire an Attorney for My Auto Accident Case?
Car accidents involving uninsured or underinsured motorists or hit-and-run drivers are complex. When serious injuries, high medical bills, and insurance disputes are involved, legal guidance can make a difference in the outcome of your case.
At Barrix Law Firm, we represent accident victims in Grand Rapids, Grand Haven, Muskegon, and across West Michigan. If you were hurt in a crash involving an uninsured or underinsured driver, our team is here to help protect your rights and fight for compensation. Contact our office today to discuss your case at no cost.
