Arguably the most important insurance you could ever buy (other than life insurance) is Uninsured/Underinsured coverage on your Pennsylvania Car Insurance.

You may not even know what Uninsured/Underinsured  coverage is let alone know if you have it on your car insurance, so you should keep reading to learn and, after you read this, immediately check your policy to see how much, if any, you have because it is critical to protect you and your family.

The Problem:  Insurance Coverage Tragedies and Judgment Proof Defendants

Every year I’ve seen several clients have  “insurance coverage tragedies” after a serious injury or death from the car accident. What is an “insurance coverage tragedy”? It’s when someone is involved in a serious car crash that was not their fault and they are either killed or very seriously injured and we find that there is little or no insurance covering the driver who is responsible for causing the crash.
Why is car insurance of the reaponsible driver relevant? Can’t you just sue the responsible person anyway, regardless of their insurance coverage?  Yes, but think of the old adage that “you can’t get blood from a stone.”
Most people do you not have enough personal assets to cover the cost of compensating someone for a serious injury or death. Fair compensation for a serious injury based upon medical bills, lost income and serious and permanent injuries could be several hundred thousand if not a million dollars or more. Most people do not have that kind of disposable cash or assets. In addition, in Pennsylvania, you cannot garnish someone’s wages for a legal claim and any assets are that are held jointly, like a married couple owning their home together, protects that asset from legal claims.
Accordingly, most people are what is called “judgment proof“ which means that even if you have a valid legal claim against them and get a huge judgment for them to pay you compensation from a court case, they won’t  have the assets or money to pay the judgment so you will never get paid.
For this reason, the amount that you can recover for your injuries in a car accident is usually limited to the amount of insurance that the responsible driver carries.
In Pennsylvania, a lot of people are uninsured and a lot of people have the minimum amount of car insurance liability coverage, which is only $15,000. Consequently, if you are seriously injured in an accident, there it is possible  that the other person who caused the accident only has $15,000 available to compensate you.
I’ve seen it countless times in my career that someone comes to me having been seriously injured or a family comes to me with their last one having been killed in an accident and we find out that the responsible driver only has $15,000 worth of coverage.  It happened just two months ago when my elderly client was hit head-on, sustained injuries and fractures head to toe and almost died.  Her claim had a fair value of about $1 million but the responsible driver only had $15,000 of coverage.

The Solution:  Uninsured/Underinsured Coverage

What is the solution to this “insurance coverage tragedy” and “judgment proof defendant” problem? Uninsured/Underinsured coverage, which is coverage that you buy on your own policy that is available to compensate you and your family for injuries that you sustain in a car accident, regardless of whether the person responsible for causing the accident has zero insurance or not enough insurance to cover the injuries and damages.
The way Uninsured/Underinsured coverage works is once you find that the responsible driver has no insurance or not enough insurance to cover your injuries,  you make a claim on your own insurance policy to make up the difference between what a responsible driver had and what the fair value of your claim is.
Since this claim  is an adversarial proceeding and your insurance company will not want to pay you what is fair (because insurance companies hate paying claims) you should have a lawyer represent you in the claim. Your claim will be resolved either through negotiation or through litigation just like the claim against the responsible driver.

How Much Uninsured/Underinsured Coverage Should You Have?

How much Uninsured/Underinsured coverage should you have? I believe that you should have as much coverage as you can afford.
Fair compensation for a death or catastrophic injury could be well in excess of $1 million. As I explained above, you can’t count on the responsible driver having any insurance and many many people are driving with the Pennsylvania state minimum of $15,000. Accordingly, you should plan on having enough coverage to pay for the whole claim for yourself.
The rule in Pennsylvania is that you can buy large amounts of Uninsured/Underinsured coverage, but you cannot buy more than the Liability coverage you have on your policy. Liability coverage is the coverage that you buy to protect yourself in the event that you cause an accident. So, if you have only $50,000 of liability coverage you can only purchase $50,000 of Uninsured/Underinsured coverage.
I know that times are tough and people are looking for ways to reduce, not increase, expenses, but I highly recommend that you take a look at your car insurance policy and consider having at least $500,000 of Uninsured/Underinsured coverage. Please talk to your agent to price that coverage and about also about the issue of “stacking“ that I will discuss in another article.
Tim Rayne is Pennsylvania car accident and personal injury lawyer with the law firm of MacElree Harvey. For over  25 years, Tim has been helping injured accident victims understand their legal rights and receive fair compensation from insurance companies. Tim has offices in Kennett Square and West Chester Pennsylvania. Contact Tim Rayne at 610-840-0124 or [email protected] or check out Tim’s website www.timraynelaw.com. 

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