What Happens When an Uninsured or Underinsured Driver Causes a Crash?
Drivers who cause collisions are supposed to be responsible for compensating the victims of serious injuries. If the collision is a deadly accident, the driver who caused the crash should be responsible for compensating the family of the person who died in the motor vehicle accident. Since most drivers don't have enough money or assets to pay a victim or his family when serious injuries or death occurs, Michigan law sets a minimum amount of insurance every driver must have. Drivers are required to carry $20,000 per person in bodily injury coverage and $40,000 per accident.
In spite of the law requiring it, some drivers don't bother to buy coverage. Sometimes drivers will purchase only the minimum coverage required by law, but then cause a crash wherein the value of the injuries exceeds the insurance coverage. These are known as underinsured drivers. For example, if a driver crashes and causes another motorist $50,000 in damages but only has $20,000 in insurance coverage, that at-fault driver is underinsured. In many cases where there are multiple victims, the insurance policy of a single at-fault driver is not sufficient enough to compensate all victims involved.
Accident victims and their families may have other options for compensation if they are involved in an accident with an uninsured or underinsured driver. It's important for those injured to understand their rights.
What Happens if a Driver Causes an Accident without Sufficient Insurance?
When a person gets into a collision, regardless of who is at fault, he or she can make a claim with his or her own insurer to get some losses covered under his personal injury protection (PIP) policy. Personal injury protection is required in Michigan and provides payment for medical bills, loss of wages and other losses. However, when injuries are serious and one's lifestyle is significantly impaired, the crash victim can file a claim for pain and suffering damages against the at-fault driver. Claims may first be filed with the third-party insurer. If the claim is denied (as is often the case), the victim may file a personal injury lawsuit.
If the driver who caused the accident has some insurance, but not enough, the victim can at least try to pursue a claim to get as much compensation as possible. We find that many crash victims purchased underinsurance on their own auto policy. If this is the case, it is possible to pursue the at fault driver to secure the entire policy limits on that policy; this settlement must be done with the expressed, written consent of the victim's insurance company. Then after the at-fault driver's policy limits are exhausted, the crash victim may pursue an underinsured claim for pain and suffering damages against his or her own insurance company.
Also, if the at-fault driver did not own the vehicle he or she was operating, there may be a claim filed for pain and suffering damages against the owner of the vehicle, if the vehicle was being operated with consent. This often triggers insurance coverage from another carriers on behalf of the owner. In addition, if the at-fault driver was in the course of employment at the time of the crash, there may a claim filed for pain and suffering damages against the employer. Similarly, when this claim is filed it typically involves an additional insurance policy on behalf of the employer. That's why having an experienced personal injury attorney as your advocate is so important.
If the driver has no insurance, the victim could still file a claim for pain and suffering damages against his or her own insurance company for "uninsured motorist benefits," assuming the victim purchased such coverage.
The most effective means of compensation in both scenarios is to file a claim for uninsured/underinsured motorist coverage with the victim's own insurance company. Auto insurance companies provide this coverage solely for this purpose. As the Michigan Department of Insurance and Financial Services notes, UM/UIM coverage is optional for drivers in this state, but it's a very smart thing to have. It can also be used to cover injuries caused by hit-and-run drivers who are never identified. A qualified attorney can help in deciding which option is best.
Fraser & Souweidane P.C. is a personal injury law firm located in Mount Clemens, MI. We protect the rights of accident victims in Detroit and throughout Wayne, Macomb and Oakland counties. Contact our personal injury attorneys today at (866) 465-9095 for a free consultation. We work on a contingency fee basis, which means you pay no fees unless we win your case.