Some motorists flagrantly violate the law. Not only do they drive in an unsafe manner, but they knowingly allow their insurance coverage to lapse. Then, if they cause collisions, the other people involved in the incident have few options available to them.
Others may not realize the risk that they have taken, but the consequences of their decisions or money management failures are the same. They deny others a straightforward process for covering collision expenses if they ever cause a crash.
Plenty of drivers make an earnest attempt to comply with the law. They carry the insurance required by state statutes. Unfortunately, those drivers might actually be underinsured, which can significantly complicate the process of addressing crash expenses.
What does it mean to be underinsured?
Lawmakers establishing regulations for liability insurance coverage have to balance the potential expenses caused by a crash with the financial implications of insurance expenses. As coverage amounts increase, policy costs rise as well.
The amounts of coverage required by the state are just enough to cover the expenses generated in a minor or moderate crash. However, if injuries become more significant, costs also become more extreme. The unfortunate reality is that the minimum insurance required by the state is not sufficient in scenarios where collisions have major consequences.
The $5,000 in property damage coverage required under law for a basic policy is not enough to replace a totaled vehicle. Bodily injury requirements fall even shorter given the potential devastation a crash can cause. Basic policies may not include any bodily injury liability coverage. The $25,000 minimum for standard policies may not be enough to pay for emergency medical treatment, let alone lost wages and future medical expenses.
People involved in major collisions often assume that they can file an insurance claim, only to realize that the coverage available through their own no-fault personal injury protection and the liability coverage of the other driver is insufficient given the scope of their losses.
What happens when drivers are underinsured?
The main priority when carrying liability coverage is to limit personal financial exposure. Those with inadequate liability insurance are theoretically personally responsible for the expenses that other people incur if they cause crashes.
A personal injury lawsuit is often the best option available when seeking to recoup expenses after a crash caused by an underinsured motorist. People can often hold the at-fault driver directly responsible for the collision. In some cases, a third-party lawsuit against a business might also be an option.
Reviewing the circumstances surrounding a recent wreck with a skilled legal team can help people defray their losses. Underinsured drivers often cause crashes that can lead to complicated compensation claims.