Uninsured vs Underinsured Motorist Coverage in Texas
January 3rd, 2018
All drivers are required to carry liability insurance in the State of Texas. Uninsured and underinsured motorist coverage are not required in Texas, however, your automobile insurance carrier is required to offer it to you. While many drivers are inclined to purchase only what’s legally required, it is important to fully understand the different types of coverage offered and make informed decisions.
Types of Automobile Insurance Coverage
The three basis types of automobile insurance coverage you need to be familiar with are: liability insurance coverage, collision insurance coverage, and uninsured/underinsured motorist coverage.
Liability Insurance Coverage
The state of Texas requires all drivers to carry liability insurance. Liability insurance pays for injuries the driver causes to other people and damages the driver causes to other people’s property. Imagine, for example, that you have only liability insurance, and are at fault in an accident with another driver. Your liability insurance will pay for the other driver’s medical expenses and for damage to his car. However, liability insurance will not cover your own injuries or damage to your car.
In addition, Texas law only requires drivers to carry what is commonly known as 30/60/25 coverage–$30,000 per injured person up to $60,000 total per accident, and $25,000 for property damage. In a serious car accident, medical bills often significantly exceed these limits. Furthermore, although Texas law requires all drivers to carry motor vehicle insurance, the Insurance Research Council (IRC) estimates that about 14% of drivers on Texas roadways don’t have the required liability insurance.
Collision Insurance Coverage
Many Texas drivers believe that they do not need uninsured and underinsured motorist coverage because they have collision coverage and/or comprehensive coverage. However, these coverages are intended to protect the value of your vehicle through repairs or cash reimbursement only, and do not assist with medical bills and other losses associated with the accident. Collision and comprehensive coverage are optional unless there is a lien on your vehicle.
Uninsured vs Underinsured Motorist Coverage (UM/UIM)
These two optional coverages are generally described together, but serve different purposes. Uninsured motorist coverage is fairly straightforward: this type of coverage protects you in the event that the driver who is responsible for your accident is not insured. While the most common scenario involves an uninsured driver hitting your vehicle, UM coverage would also kick in if you were otherwise injured by an uninsured motorist—for example, if you were a pedestrian hit by an uninsured motorist while crossing the street.
Underinsured motorist coverage is intended to fill the gap when the driver who is responsible for your injuries and other losses is insured, but his or her insurance coverage isn’t adequate to compensate you. Imagine, for example, that you sustain serious injuries in a car accident. You successfully sue the other driver and the jury awards you $500,000 to cover medical bills, lost income, and other damages. However, it turns out that the defendant only had the required 30/60/25 coverage and has no assets to cover the remainder of the judgment. In that situation, your UIM coverage would kick in to pay the remainder of the claim (up to your policy limits).
How Important is Uninsured and Underinsured Motorist Coverage?
There are currently more than 15 million licensed drivers in Texas. According to IRC’s data, that means that about 2,115,000 are driving with no liability insurance at all. When you’re sitting in rush hour traffic surrounded by 50 other cars, statistics say that about seven of those 50 drivers will be uninsured. Structuring your insurance to protect yourself and your family in the event of an accident with one of those drivers is critical.
Underinsured motorist coverage may seem less important, since you can expect at least some recovery from an at-fault driver who is insured. However, it’s important to consider the realistic costs of an accident. The Centers for Disease Control and Prevention (CDC) has determined that the average cost of a crash-related hospitalization over the victim’s lifetime is $57,000. Of course, more serious accidents can result in much greater medical costs. Yet, millions of Texas drivers are carrying minimum liability insurance, which limits medical compensation to $30,000 per victim and $60,000 per accident. And, the CDC figures do not include other damages, such as lost income and earning capacity.
Hiring an Uninsured and Underinsured Motorist Lawyer
Purchasing uninsured and underinsured motorist coverage can fill the gaps so that you have access to fair compensation even if the driver responsible for your injuries does not have adequate coverage. However, it is important to realize that just having the coverage does not mean the insurance company will pay you the benefits easily when you are injured. Many claimant still must hire an uninsured and underinsured motorist attorney to fight their own insurance companies in order to get a fair settlement. If you find yourself fighting with your own insurance company to get the benefits you paid premiums for, call us for a free consultation to learn your rights.
Paul Cannon has practiced personal injury trial law since 1995. He is Board Certified in Personal Injury Trial Law (2005). He has earned recognition as a Super Lawyer by Thompson Reuters in 2017 & 2018, and as a Top 100 Trial Lawyer by the National Trial Lawyers Association in 2017. He is a Shareholder, trial lawyer and online marketing manager at Simmons and Fletcher, P.C. His legal writings have been published by the Texas Bar Journal, Lawyer.com HG Legal Resources, Lawfirms.com, AttorneyAt Work.com and others. He has been asked to give education talks and media interviews on Texas and National Dog Bite Law.