Part 2 – Uninsured/Underinsured Motorist (UM/UIM)
In Alabama, uninsured/underinsured motorist (UM/UIM) coverage is included in all automobiles policies issued in the state, unless it is rejected, in writing, by each named policy holder. In the absence of a signed rejection, you have UM/UIM coverage by default, even if you have not paid any premiums for this additional coverage.
UM/UIM coverage allows you to make a claim on your policy for injuries that you (or anyone else covered under your policy) have sustained due to someone else’s negligence. Basically, UM/UIM coverage is a substitute for another driver’s lack of either any bodily injury liability coverage or sufficient bodily injury liability coverage. In some instances, it is not even necessary that you be in your automobile when you are injured to make a claim for UM/UIM benefits. For instance, you could be riding a bicycle or walking down the sidewalk and get hit by a car.
Consider this example: If you had $30,000.00 in medical bills as the result of a wreck and the other driver (who caused the wreck) only had $25,000.00 in bodily injury liability coverage, you would be able to make a claim on both the other driver’s policy and the UIM coverage under your policy.
One unique characteristic of UM/UIM coverage is that it can be “stacked,” meaning that you can actually recover UM/UIM benefits based on insurance that you maintain on vehicles that you own, but you were not driving at the time of the wreck, subject to certain limitations. Thus, if you own 3 cars and have $25,000.00 in UM/UIM coverage on each of them, you would then have $75,000.00 in UM/UIM coverage, even if the cars were insured under different policies or with different insurance companies.
UM/UIM coverage does not apply to property damage. Therefore, you cannot make a claim for UM/UIM benefits because the other driver had either no insurance or insufficient insurance coverage to repair or replace your automobile as the result of a wreck.
Your limits of UM/UIM coverage should be about the same as the amount of your bodily injury liability coverage. If you are going to insure yourself from injuries that you might cause another person, you should equally protect yourself from injuries that might be caused by someone else. Realize, however, that many insurance companies are beginning to cap the amount that they will offer in UM/UIM benefits and may not issue a policy with the same limits of coverage as your bodily injury liability coverage. If this is the case, then you may want to seriously consider shopping around for a different insurance carrier.