It is likely that we or someone in our family, at some point, will become involved in an automobile collision, ranging from at the very least, a “fender bender” involving no injury with little to no property damage, to the most significant collision, involving catastrophic loss or death. At the time, we may be the driver of a vehicle, a passenger, a cyclist, or walking pedestrian. The person(s) at fault come from all walks of life, and may be operating their vehicle during personal time, or while working for a company. The at fault party may be driving a normal everyday automobile, or may be operating an 18 wheeled tractor/trailer requiring a Commercial Driver’s License (CDL).
We really never know what we may encounter on the roadway while travelling or traversing. So this begs the question of how can we ensure that we and our families are safe? What can we do to ensure that no matter what happens on the roadway, there is some level of insurance protection to cover our damages in the event of a significant vehicle collision or vehicle related incident while traversing on bike or foot?
The South Carolina Financial Responsibility Act
The South Carolina Financial Responsibility Act requires all passenger vehicles to carry “minimum limits” of liability insurance coverage in the amounts of $25,000.00 per person…bodily injury; $50,000.00 per accident, and $25,000.00 for property damage. (25/50/25). This means that if the at fault person’s vehicle has this minimum amount of coverage, and that person has no substantial assets to pay for your injuries and damages, that the most that one single injured individual could receive would be $25,000.00 for bodily injury, and $25,000.00 for property damage. The most everyone with claims could receive for bodily injuries would be $50,000.00 from the minimum limits liability policy.
Mandatory & Optional Uninsured Motorist (UM)
Unfortunately, some vehicles traveling on our roadways have no insurance coverage. Policies lapse for failure to pay premiums when people are having financial difficulties, yet they need to get to work. Others just willfully operate without insurance. Regardless, an uninsured vehicle poses a risk to everyone on the roadway; so, just as the legislature ensured that there are “minimum limits” of liability coverage of 25/50/25, the Act also requires each policy to provide 25/50/25 in legislatively mandated uninsured motorist coverage. As an option, an insurer is required to offer additional amounts of uninsured motorist coverage in amounts up to the insured’s liability vehicle insurance limits.
Optional Underinsured Motorist (UIM) Coverage
When the at-fault party has some liability insurance, but not enough to compensate the injured party for damages, UIM coverage applies. UIM, like UM coverage is “first party” insurance; in other words, it is insurance that a person or company purchases to protect himself, passengers in his vehicle, and members of his household from being injured by a person not carrying enough liability insurance coverage to pay all of the damages. The Financial Responsibility Act does not require that every automobile insurance policy carry UIM, only UM. However, the law does require that UIM be offered in amounts up to the amount of a person’s automobile liability insurance coverage.
Stacking of UM and UIM Coverage for Class I and Class II Insured Persons
The typical UM or UIM first party insurance policy will define the “insured” as the named insured, passengers in an insured vehicle, and resident relatives in the household of an insured. The scope of covered activities, which invokes UM or UIM coverage involves any activities involving the “use, ownership, or maintenance of a vehicle.” Claims arise out of a number of situations.
If an person is riding in their own vehicle at the time of a collision, which is insured by a policy of UM or UIM, they are considered to be a Class 1 insured. If that vehicle is insured on a policy that has other vehicles insured on the policy, then this Class 1 insured may “stack” the coverages afforded to other vehicles on the policy. For example, if there are three policies of 50/100/25, then effectively, coverage is stacked to give total coverage of 150/300/75. If there are various coverages on various vehicles on the same policy, the injured insured person may stack the policies only to the amount of coverage for the vehicle involved in the accident.
A Class 2 insured is a person who is insured by UIM or UM, but was not involved in an incident occurring within an insured vehicle. For example, suppose a student resides with his parents. While riding to school with a schoolmate, the schoolmate is involved in a collision that is the fault of another vehicle. First, the at fault party’s liability insurance will apply; then any UIM coverage on the vehicle will apply, and can be stacked; and third, should the limits of the primary liability and UIM coverage be exhausted, the UIM coverage at the student’s parent’s home would apply to cover him, but could not be stacked, since the student was not in the parents’ insured vehicle at the time of the wreck.
Scope of UM and UIM Coverage is Wide
UIM and UM coverage are implicated in a wide variety of instances involving the use, ownership or maintenance of a vehicle. The South Carolina Supreme Court has held that UM coverage applied to an injured party who was shot by another person who held the gun out of a window of a jeep. The court reasoned that the gunman used the jeep as a “gun platform,” and that constituted “use” of a vehicle to invoke UM coverage. Also, as a cyclist or pedestrian, if you have your own vehicle at home that is insured with UM or UIM coverage, then you are covered if you are struck by a vehicle that is either uninsured, or where there is a hit and run and the “John Doe” at fault driver leaves the scene. There are certain requirements, such as having to have an affidavit of an independent witness etc…to prevent fraudulent claims.
Conclusion: Buy as Much Liability, UM and UIM Coverage as You can Afford
We should buy as much liability, UM and UIM automobile insurance policies as we can afford. The per thousand premium cost over and above the minimum limits policies goes down as the amount of coverage goes up. This is the only way to ensure that you, your vehicle occupants and family members are protected against uninsured and underinsured motorists. There is not much worse that having a family come into the McKnight Law Firm office in regards to someone suffering catastrophic injury or the death of a loved one, and having to tell them that the person that caused the collision has no assets, no insurance, and there is little or no uninsured or underinsured motorist coverage; coverage that could have been purchased for just a few more dollars per month.
This article discusses only the very basics of UM and UIM coverage. If you are involved in a serious automobile collision, call the McKnight Law Firm. We will ensure that claims will be made against all liability, UM, UIM, and other potential coverages that may be applicable to your case.