What is Uninsured/Underinsured Motorist Coverage?
The most important type of auto insurance you can buy is your uninsured and underinsured motorist coverage. Your liability insurance largely protects other people. Your property damage insurance protects your car (and any bank that has a note on your car). But your uninsured or underinsured motorist coverage protects you and your family in the event you’re in a wreck caused by a driver who doesn’t have insurance (an uninsured driver) or who doesn’t have enough insurance to cover your losses (an underinsured driver).
Uninsured/underinsured motorist coverage applies in several situations. When you buy uninsured/underinsured motorist coverage, it protects you whenever you are in a wreck caused by an uninsured or underinsured driver. This typically occurs when you are in your own car. But the coverage protects you beyond that. Your coverage will protect you when you are hit as a passenger in someone else’s car, as a pedestrian, when you’re riding your bike, and even when you’re riding a horse or sitting on your porch. When an uninsured or underinsured driver causes you injury, then your uninsured/underinsured motorist coverage will protect you (assuming an exclusion doesn’t apply).
In addition to protecting you, your uninsured/underinsured motorist coverage also extends to anyone who is in your vehicle when your vehicle is hit by an uninsured or underinsured driver. For example, if you are driving with a passenger, and an uninsured driver hits your car, then both you and your passenger are entitled to make a claim on your policy.
As a result of this protection, many passengers are protected by two uninsured/underinsured motorist policies. They are covered by their own insurance that they buy as part of their own policies, and then they are covered by an insurance policy that covers the car that the passengers were riding in at the time of the wreck.
Why Do I Need Uninsured/Underinsured Motorist Coverage?
It is critically important that you carry uninsured/underinsured motorist coverage to protect you and your family. Unfortunately, most Texan drivers either don’t carry any insurance or don’t carry enough insurance to fully compensate you when you’re injured. According to the Texas Department of Motor Vehicles, over 2.6 million Texas vehicles aren’t covered by any insurance. When cars do have insurance, the vast majority of the policies are limited to the $30,000.00 required by law. Unfortunately, this is rarely enough to fully compensate injured persons for their injuries. Even a quick trip to the emergency room can result in medical bills that exceed $30,000.00. That’s not to mention the other items you could recover, such as pain, mental anguish, lost earnings, and physical impairment.
Uninsured motorist insurance will also protect you when you are hit by a hit-and-run driver. Texas law has special provisions regarding hit-and-run drivers, but as long as there is contact between your vehicle and the hit-and-run driver’s vehicle, then your uninsured motorist coverage will protect you if you can’t track down the identity of the hit-and-run driver.
Your uninsured motorist coverage will also protect you if the other driver’s insurance denies coverage — says that it’s not going to pay. This can happen for several reasons, but the most common reason insurance companies deny claims is if the driver is excluded from the policy. Many persons buy insurance but identify drivers who aren’t covered by the policy (usually because those drivers have bad driving history and would make the rates even more expensive). Then, when the excluded driver actually drives the car and causes a wreck, the insurance company denies the claim. When this happens, the driver who caused the wreck is considered an uninsured motorist, and your uninsured motorist insurance will protect you.
This is important insurance. In fact, it is so important that Texas law says you have the insurance when you purchase auto insurance unless you specifically affirm in writing that you don’t want the insurance.
Despite this, we find too many victims who have not purchased uninsured/underinsured motorist covereage. We routinely have to tell prospective clients that we can’t help them because they didn’t buy uninsured/underinsured motorist coverage. Don’t let that be you.
Do I Need A Lawyer To Handle My Uninsured/Underinsured Motorist Claim?
A lot of injured persons believe that insurance companies in uninsured/underinsured motorist claims will treat them fairly since the claims are with the injured person’s own insurance company. That couldn’t be farther from the truth.
Insurance companies have specially trained adjusters who handle the claims for the insurance companies. More and more insurance companies also have created their own law firms with lawyers who are specialized in these types of claims. All of these people receive extensive training with one goal in mind — minimize what the insurance company is paying you.
If you try to handle your claim yourself, you can be sure that the insurance company will do everything it can to take advantage of your lack of experience and knowledge. That’s why it’s important to hire an experienced uninsured/underinsured motorist lawyer — to protect your rights.
In the past, we have been approached by many clients who have tried to handle their own claim, thinking they could hire a lawyer later if they need one. This is a mistake. There are a number of ways that you can harm your claim trying to handle it yourself.
1) Recorded statement.
Unlike claims against other drivers, you’re required to cooperate with your uninsured/underinsured motorist insurance company and give them a recorded statement when they ask for it. However, when you give this statement without being prepared by a lawyer, you’re likely to make mistakes that hurt your claim (and can’t be fixed when you hire a lawyer later).
2) Giving too much information.
When you open your claim, your insurance company will send a number of forms seeking information from you. More often than not, the insurance companies will ask for more information than they’re really entitled to receive. If you don’t know what you are required to turn over and what you are able to keep, then you’re likely to give the insurance company information that they’re not entitled to receive. Oftentimes, that information ends up hurting your claim. Again, this is not an error that can be fixed by hiring a lawyer at a later date.
3) Not knowing what you can recover.
Do you know what types of damages you’re entitled to recover from your uninsured/underinsured motorist carrier? Most injured persons don’t know what they’re entitled to ask for. And the insurance company sure isn’t going to tell you that you’re entitled to ask for additional types of damage. As a result, many injured persons handling their own claims start negotiating with the insurance company without being fully informed of their rights. Once they can’t get a fair settlement, and they come to a lawyer, those earlier negotiations often limit the lawyer’s ability. (Or even worse, you might settle your claim thinking you’re getting a good settlement when the insurance company is putting one over on you.)
4) Ruining the value of your claim when settling with the at-fault driver.
When you have an underinsured motorist claim, you typically settle with the other driver’s insurance first. However, there are steps that you must take during that settlement to protect your underinsured motorist claim. If you don’t know these steps and don’t take these steps, it could result in you losing your right to pursue your underinsured motorist claim.
The most experienced persons know about these problems and seek legal help for their claims. Over the years, we have been privileged to represent a number of lawyers and family members of lawyers in their uninsured/underinsured motorist insurance claims. These lawyers know that it would be a mistake to try and handle their claims themselves, and you should follow their lead.
And today, it’s even more important than ever to have a lawyer fighting for you in your uninsured/underinsured motorist claim.
In the past, most uninsured/underinsured motorist claims were resolved fairly amicably by attorneys for the parties. Insurance companies had duties to their customers, and the insurance companies often worked hard to treat their customers fairly. There were a couple of reasons for that. First, if the insurance company didn’t properly pay the claim, the customer could recover the attorneys’ fees that the customer incurred in pursuing the claim. Second, if the insurance company didn’t timely pay the claim, there were penalties, including a penalty of 18% interest, that were chargeable to the insurance company. The threat of these expenses and penalties served as a strong incentive for the insurance companies to act properly and pay the claims.
That all changed in 2006 when the Texas Supreme Court changed the law by issuing the case of Brainard v. Trinity Universal Insurance Company. The case is complicated, but the net effect is that it made the claims more complicated, more time consuming, and removed many of the incentives for the insurance companies to act right. As a result, since that time, these cases have been much more difficult.
In the past, uninsured and underinsured motorist claims were largely a two step process. First, your lawyer would present a settlement package to the insurance; and second, if your lawyer couldn’t settle the case, then your lawyer would file a breach of contract claim against the insurance company. As part of the breach of contract claim, a prevailing victim would be entitled to recover for the victim’s losses, the attorneys’ fees that the victim incurred, and 18% interest on the amount of the claim.
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Four Steps to Getting The Compensation You Deserve
As a result of the Brainard case, the Supreme Court has created a four step, two lawsuit process to get to the same point that was easily obtainable under the old law.
First, lawyers still present a settlement package to the insurance company.
Second, if your lawyer can’t settle the case, then your lawyer will have to file an initial lawsuit asking a court or jury to determine the amount that the insurance company owes under the policy.
Third, once that trial is over, you have to again present the claim to the insurance company asking for the amount the jury determined you were entitled to recover.
Fourth, if the insurance company doesn’t pay that amount, then you can sue the insurance company for breach of contract, which would allow you to recover attorneys’ fees and 18% interest.
Unfortunately, uninsured and underinsured motorist cases have also become much more confusing as a result of the ruling. Even though the case was decided years ago, many lawyers around the state are still confused about the new processes created by the changes and the legal implications of the changes.
To help victims, Brooks Schuelke has spent a significant amount of time writing articles about the changes to the law of uninsured and underinsured motorist cases and giving speeches to lawyers throughout the state about how to best handle these cases to increase the chances of recovery. Brooks also spends a significant amount of time helping other lawyers present their claims for their clients. It is not unusual for other lawyers to give Brooks a call asking questions about the lawyers cases or for Brooks to review and even edit other lawyers’ court filings to help their clients recover.
Talk To a Lawyer About Your Claim
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If you or a loved one are injured by an uninsured or underinsured driver, call us at (512) 476-4944 and we'll be glad to help you. Remember that if you fail to pursue your claim in a timely manner, you could lose your rights to make a claim.