A paramount responsibility of adults is the financial well-being and the long-term stability of both ourselves and our families. Examples include how much to save for emergencies, how to invest retirement proceeds, and where to buy a home. Equally important is the management of risk, which historically has been handled, at least in part, through the purchase of insurance.
We guard against the death of a breadwinner by purchasing life insurance. Families protect themselves against costly medical treatment with health insurance. Homeowners insurance protects us against fires, storms, and other perils. And we protect ourselves from financial liability for automobile accidents by purchasing automobile liability insurance.
In return, we hope that other drivers have also purchased liability insurance, so that they can meet their financial obligations to us for any damages that they negligently cause. But what if another driver has not purchased liability insurance and causes an accident? We’ll discuss that issue in this article.
The Government Has a Say When It Comes to Automobile Liability Insurance
Automobile accidents happen by the thousands every day, sometimes causing extraordinary levels of physical damage and personal injury. Resulting expenses can range from relatively minor to exorbitant. In the latter instance, injured victims can only be made whole if the defendant tortfeasor has substantial assets or applicable insurance coverage.
State governments recognize that it is crucial to ensure that all drivers possess a minimum level of financial ability to meet their obligations if they harm another motorist. However, governments also realize that some automobile owners, if left entirely to their own devices, might fail to obtain appropriate insurance. Thus, most states mandate that automobile owners possess a minimum level of automobile liability insurance.
Some states require that drivers buy additional coverages, such as medical payments coverage and uninsured motorist coverage.
In Oregon, the law requires the following minimum coverages:
- $10,000.00 property damage;
- $15,000.00 personal injury protection (sometimes called “PIP”);
- $25,000.00 bodily injury liability for a single person;
- $50,000.00 bodily injury liability for multiple people in a single accident;
- $25,000.00 uninsured (and underinsured) motorist coverage (sometimes called “UM” or “UIM”).
Don’t Underestimate the Importance of Uninsured Motorist Coverage
So, what happens if you are involved in a motor vehicle accident with a driver who does not have liability insurance (an uninsured driver) or a driver who has coverage, but not enough to cover your damages (an underinsured driver)?
While many people think the chance of this happening is remote, statistics tell a different story. According to a study published by the National Association of Insurance Commissioners, approximately 13 percent of drivers were uninsured in 2014. And this statistic considers only those with no insurance. There are many more complex cases, such as those who purchase the minimum limits of liability insurance required by law, but will be underinsured if they are liable for an accident with serious injuries.
Being the injured victim in such circumstances can be devastating. While you may have health insurance that helps pay the cost of medical treatment, that does not cover damages such as lost wages and pain and suffering. Plus, your health insurance may include deductibles and co-pays that you must absorb. You can sue the negligent driver, but if he or she does not have adequate assets, there will be no way to recover any judgment in your favor.
This is where uninsured or underinsured motorist insurance comes into play. Uninsured or underinsured motorist insurance (also known as UM) is coverage that you add to your own car insurance plan, which then covers another driver’s liability when that driver does not have insurance or has insufficient insurance.
Oregon requires every driver to obtain $25,000.00 in UM coverage, but for most people that’s probably not enough. Just imagine if you are seriously injured by an uninsured driver. Would you be comfortable with a maximum of $25,000.00 in coverage? Probably not.
An insurance professional can help you make this decision on how much UM coverage to buy, but many people suggest obtaining as much UM coverage as you have in liability coverage.
Call with Questions
We know insurance can be confusing at times, but it’s an important element in making sure that negligent drivers can meet their financial responsibilities for the injuries that they wrongfully cause.
At Nelson MacNeil Rayfield, our personal injury lawyers work hard to make sure that wrongdoers are held accountable for their actions. We deal with insurance every day and would be happy to answer any questions that you have. Please feel free to call or contact us today.