In our last blog, we discussed the purpose of uninsured motorist (UM) insurance.  The companion to uninsured motorist insurance is underinsured motorist insurance.  This is commonly referred to as (UIM).

Many people are hesitant to purchase more than the required $25,000 in UIM coverage because they operate under the misconception that UIM insurance is there to protect the other driver if they are injured by your negligence, and you don’t carry enough liability coverage to compensate them for their injuries.  Nothing could be farther from the truth, and ignorance on this matter could end up costing you more than you can imagine.

As we stated earlier, every owner of a motor vehicle in Minnesota is legally required to carry certain minimums of insurance coverage. That is true for you, as well as every other driver on the road.  The minimum coverage required includes:

  • No Fault Coverage
  • Liability Coverage of $30,000
  • Uninsured Motorist (UM) Coverage of $25,000
  • Underinsured Motorist (UIM) Coverage of $25,000

Liability coverage protects you, up to your limits, if you injure someone due to your negligence.  Underinsured Motorist (UIM) coverage, on the other hand, is there to protect you and your passengers if there is an injury caused by another negligent driver, who doesn’t carry enough liability coverage to compensate you or your passengers for their injuries.

Because the minimum required liability coverage is usually the cheapest coverage, many Minnesota drivers only carry the minimum liability coverage ($30,000).  That means if your injuries are greater than the amount of the other driver’s liability limits, that driver is  by definition “underinsured”, and your remedy is to collect for your injuries that exceed the $30,000 in liability coverage, directly from your own UIM coverage.  That is why it is important to carry more than the law requires.  If all drivers carry only the minimum coverage, any serious injury caused by the negligence of another driver would limit you to $55,000 in recovery ($30,000 from the other driver’s minimum liability coverage; and $25,000 from your own minimum UIM coverage).  Not much protection for you and your family.

Consequently we recommend that you increase your UIM coverage to a minimum of $100,000.  This increases the minimum protection to $130,000, assuming the other driver is carrying the minimum liability coverage of $30,000.  If your injuries are significant, this still may not be enough to compensate you, but it is better than the minimum of $55,000.

We hope you see that purchasing higher limits of “UIM” coverage is not to protect the other driver, but rather to protect you and your loved ones, from the “underinsured” driver.  The attorneys at Nelson Personal Injury strongly recommend you speak with your insurance agent to make sure you have enough coverage to protect your family if you are injured by a negligent, “underinsured” driver.  As always, if you have been in a motor vehicle accident, contact us today for a free consultation.