Reluctance Filing a Claim Under a UM/UIM Policy
Some clients are reluctant—and even opposed—to file a claim against their insurance policy when the at-fault driver is uninsured or underinsured. For the reasons discussed below, a client in this situation reduces a claim’s value substantially—if not entirely—when he or she decides not to file a UM/UIM claim.
What is UM/UIM Insurance?
UM/UIM insurance is first-party coverage that protects the policyholder in three situations:
When the at-fault driver does not have a valid liability policy;
When the at-fault driver’s liability insurance policy limits are not high enough to cover the victim’s damages; and
When the at-fault driver causes a hit-and-run with actual physical contact between the vehicles.
Texas insurance companies must offer UM/UIM insurance when selling auto policies. However, UM/UIM policies are optional because a policyholder may reject this coverage in writing.
Why Are Some Crash Victims Reluctant to File UM/UIM Claims?
Reason One: “I don’t want my insurance company to increase my premiums or drop me.”
Although policyholders can opt-out, many purchase UM/UIM coverage because a sizable number of motorists—especially in the Rio Grande Valley—routinely drive without liability insurance. When an uninsured or underinsured driver injures a client, I recommend filing a UM/UIM claim since it usually is the only way my client will receive any form of compensation.
After my recommendation, almost every client asks the following questions: “If I file a UM/UIM claim, will my premiums go up? Will my insurance company cancel my policy?” I cannot guarantee that the client’s insurance company will not take such actions. However, I have never had a client inform me that his or her insurance company has canceled coverage or increased the premiums after filing or settling a UM/UIM claim. Most reputable insurance companies will not do so because the policyholder did not cause the accident.
Still, some clients are worried that their insurance companies will punish them for filing a claim against their policies. Since UM/UIM coverage is optional, I (jokingly) recommend canceling that coverage. I explain that the client could save money by canceling optional coverage that he or she is opposed to using when necessary. Also, I (jokingly) recommend switching to a carrier that does not punish its policyholders for using optional coverage—that requires additional premiums—for the very purpose that it exists: to protect the policyholder when an uninsured or underinsured driver’s negligence causes the policyholder to incur damages.
Reason Two: “The other driver caused the accident. Why should I use my insurance?”
Still, some clients are reluctant to file a claim against their UM/UIM policy even when the at-fault driver is uninsured or underinsured. These clients believe that filing a claim on their insurance is similar to releasing the at-fault driver from liability. This belief is incorrect.
When an insurance company pays a claim under a UM/UIM policy, it has a statutory right of subrogation against the at-fault, uninsured driver. Subrogation is a legal concept that gives that the UM/UIM carrier the right to pursue a claim or lawsuit against the at-fault driver to recover the money it paid to the victim. While it does not make practical sense for an individual to sue an uninsured driver, insurance companies have more resources to prosecute and collect judgments from uninsured drivers. These tools include suspending the driver’s license or motor vehicle registration or sending the judgment to debt collection agencies.
The bottom line is a crash victim essentially forecloses the possibility of receiving any meaningful compensation by not filing a UM/UIM claim. In doing so, the crash victim does what he or she aimed not to do: allow the uninsured, at-fault driver to “get away” with causing an accident.
Hire an Injury Lawyer With Experience Handling UM/UIM Claims
If an uninsured or underinsured driver has injured you or a loved one, you have enough things to worry about. Do not let navigating through the complexities of a UM/UIM policy and negotiating with an experienced adjuster be some of them. We deal with the insurance company so you can focus on getting your life back to normal. You have one chance to do this; make the right choice by choosing the right attorney. Call us at (956) 291-7870 or email us at contact@rdjlawyer.com for a free consultation and case evaluation.