The Cassidy Law Firm Blog

Monday, December 14, 2020

How Does UM Coverage Work?

In New Jersey, all drivers are required by law to carry uninsured and underinsured motorist coverage (UM/UIM). The minimum coverage amounts are $15,000 per person per accident, $30,000 per accident, and $5,000 for property damage. While this is the minimum required coverage for UM/UIM, you can always opt for higher coverage limits. This may be a good idea considering 2015 estimates from the Insurance Information Institute reflect that nearly 15% of New Jersey drivers are uninsured. Before purchasing higher UM/UIM limits, however, you may want to learn more about how it actually works.

How Does UM Coverage Work?

Uninsured motorist coverage comes into play when the other vehicle involved in an accident does not have any insurance coverage. Underinsured motorist coverage comes into play when the other vehicle involved in an accident carries insurance, but the coverage limits are not sufficient to pay for all of the damages incurred by others in the accident. When you are in an accident and you have standard UM/UIM insurance coverage, your own insurance company may pay out on damages caused by a party that did not have insurance coverage at the time of the accident. Alternatively, your insurance company may pay when the other party in the accident has liability coverage but, for some reason, his or her insurance company denies policy coverage regarding the accident at issue. Also, your insurance company may pay out on your UM/UIM policy should the other party involved in the accident not carry insurance coverage sufficient to pay your damages in full.

Should the other driver carry insurance, but not have sufficient coverage to pay for your damages in full, it is important to note that you must first submit your damages claim to the other driver’s insurance company before you can seek access to your UIM benefits under your own insurance policy. The other driver’s insurance company will make a determination of fault and, if they find that their insured driver was at fault, they will pay out on your damages claim. Once you have exhausted the insurance available from the other driver, you may make a claim against your own UIM coverage.

It is also important to highlight the fact that, when you file a UM/UIM claim, your insurance company will essentially stand in the shoes of the other driver and will only pay out on your claim if the other driver was in fact at fault for causing the accident. New Jersey’s comparative negligence law provides that you are only able to collect damages if your percentage of fault in causing the accident is less than that of the other driver(s) involved in the accident. While the comparative negligence law permits more than one person to be held liable for an accident, your insurance company will likely reduce your UM/UIM settlement amount by the percentage of fault you carry in causing the accident.

New Jersey Personal Injury Attorneys

Insurance laws can be difficult to figure out but are a critical element in personal injury claims. That is why the Cassidy Law Firm is available to step in and help those accident injury victims. We take on the legal burdens while you focus on getting better. Contact us today.


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