Difference Between Uninsured vs. Underinsured - Call Lee Free

I'll Be Right There

Request Free Consultation

What’s the Difference Between Uninsured and Under-Insured Motorist Coverage?

This article is about the difference between uninsured and under-insured motorist claims.  These two types of insurance claims are very important, especially in an era where more and more people are driving without insurance. 

There are different types of liability coverage in Michigan.  The most basic one, and the one that is required for all vehicles driving on Michigan roadways, is residual liability coverage – also known as bodily injury (BI) coverage.  This type of insurance coverage covers you if you or an authorized driver of your car causes and accident that injures another person.  The current minimum in Michigan is $20,000 per person and $40,000 per accident.   

But if the person who causes an accident doesn’t have car insurance?  Or what if the coverage is not enough to cover the injuries you sustained?  What happens then? 

 The answer is an injured person can turn to a car insurance company for uninsured motorist (UM) or underinsured motorist (UIM) coverage. 

First, an explanation of what uninsured motorist and under-insured motorist coverage are:

Uninsured motorist (UM) coverage is insurance coverage that covers an injury if the at-fault vehicle is not insured.  The classic example is a hit-and-run accident. 

Under-insured motorist (UIM) coverage covers situations where the at-fault driver’s insurance policy is not enough to cover the injuries he or she caused.  For example, if the at-fault person only has $20,000 in liability insurance, but you sustained injuries that exceed this low $20,000 liability coverage, you may obtain additional compensation by making an under-insured motorist claim.  

These two coverages are not mandatory.  This means a policyholder does not have to purchase UM or UIM coverage when purchasing auto insurance.  However, if you are injured in a car accident, it is important to contact your own car insurance about both uninsured motorist and under-insured motorist coverage.  Even if you don’t have car insurance, you can still open a claim for uninsured motorist or under-insured motorist coverage if the vehicle you occupied carried the coverage. 

It is important to understand that UM and UIM are different and cannot be used together.  You are either involved in an accident where there is no insurance for the at-fault vehicle (uninsured motorist claim), or you are involved in an accident where the liability coverage is not enough to cover the injuries you sustained in the car accident (under-insured motorist claim).

Because the two coverages are not mandatory, the insurance policy contract sets the rules for how the claims are to be handled and how compensation can be paid out.  Most insurance companies have very specific rules for UM and IUM claims, including:

—  Requiring a police report be made within a certain time frame following the accident, often within 72 hours;

—  Requiring the insurance company be notified about the car accident within a designated time frame, often within a week of the accident;

—  Requiring actual physical contact between two motor vehicles;

—  Requiring the injured claimant to provide all medical providers and addresses to the insurance company within a specified time period; and

—  Other requirements

Following these rules is important.  If you don’t follow what the insurance policy says, you may lose the ability to collect compensation.  Uninsured and under-insured motorist claims are very specific types of insurance claims.  Because of the various rules a claimant must follow, it is advised to contact an experienced attorney who has handled these claims before.

The Lee Steinberg Law Firm, P.C. has handled literally thousands of uninsured and under-insured motorist claims for clients all over the State of Michigan for over 40 years.  Contact our dedicated and hard working team of Michigan car accident lawyers so we may answer your questions.  As always, you can reach us at 1-800-LEE-FREE (1-800-533-3733).