An unfair result that I see pretty frequently in Washington state personal injury matters is when a legitimately injured person has sustained injuries, but the person essentially has no realistic way of recovering their damages. This happens frequently when a person does not have an Uninsured Motorist (UM) or Underinsured Motorist (UIM) coverage with an auto policy. Below are some insights about UM/UIM law and why it is so important that one have UM/UIM coverage in Washington state.
Please note that this is an informational blog and not intended to be a treatise on Washington state UM/UIM law. There are various additional procedures in place. A person should consult with an attorney when addressing a UM/UIM matter.
What is UM/UIM Coverage?
UM coverage applies when one has a claim for personal injuries against an uninsured driver or a phantom vehicle (an unidentified vehicle). UIM provides potential compensation to one injured by a driver with coverage insufficient to compensate the injured person. UM/UIM coverage is generally always contained in the same section of an auto policy, and the premium paid is for both UM and UIM coverage. UM/UIM coverage can also cover passengers and members of the insured's household.
The law in Washington state requires all auto insurance companies to offer UM/UIM coverage to policyholders. However, UM/UIM coverage must only be offered to the insured by the auto insurance company; an insured can waive UM/UIM coverage. The waiver must be clear. In fact, if UM/UIM coverage has not been properly waived, an insurance company can be forced to retroactively provide coverage.
How Does UM/UIM Coverage Work?
Under Washington state law, the UM carrier steps into the shoes of the at-fault driver. What this means is that the UM/UIM carrier becomes something of a substitute party for the uninsured, underinsured, or phantom driver. An insured is essentially in an adversarial relationship with his or her own insurance company when UM/UIM issues emerge; this can surprise many people who've had insurance with the same company for years. At the same time, the UIM carrier is subject to laws such as the tort of bad faith and the Insurance Fair Conduct (IFCA) statute when processing an insured's UM/UIM claim. In a nutshell, my interpretation of the law is that a UIM carrier can be adversarial, but they must also be reasonable when addressing an insured's UM/UIM claim. The carriers must often be reminded that they do have responsibilities to their own insured persons in UM/UIM situations.
What Are Some Examples of UM/UIM Matters?
Here are three basic scenarios:
Example A: John is driving on I-5 southbound by Safeco Field in Seattle. John is rear-ended by a woman named Mary. The police arrive at the scene. Mary does not have any auto insurance. John is fortunate that he has a UM/UIM policy. John will be able to pursue his UM claim against Mary through his own insurance company.
In another scenario, if John did not have UM coverage, he would be able to potentially pursue a claim against Mary directly. However, his chances of recovering anything against Mary are probably pretty slim if Mary has little or no assets. When the UM carrier steps into the shoes of the at-fault driver, it can enable John to potentially obtain the same or similar recovery that he would obtain against Mary as if she had insurance.
Example B: Elizabeth is driving in north Tacoma. Elizabeth is injured when Fred runs a red light and collides into Elizabeth's vehicle. Fred has the minimum of $25,000 in liability coverage to cover Elizabeth's claim. However, Elizabeth's injuries exceed the $25,000 in liability coverage that Fred has to cover her claim. Elizabeth is fortunate that she has an UM/UIM policy, so she will be able to pursue a claim against Fred and hopefully obtain a policy limits $25,000 settlement from Fred's policy. Elizabeth will also be able to pursue a UIM claim against her insurance company for benefits because Fred's policy did not sufficiently compensate her.
If Elizabeth did not have UIM coverage in this situation, she would be able to pursue a claim against Fred and try to recover his available insurance policy limits, but she would not be able to pursue an UIM claim for additional compensation from her own insurance company. She could end with a lot less than compensation than she deserves here if she has no UIM coverage.
Example C: Stan is safely stopped at a stop sign one evening near Bellevue Square in Bellevue. Stan is hit rear-ended by a driver who speeds away. Stan is injured and unable to obtain the identity of this phantom driver. Stan is fortunate because he has UM/UIM coverage where he can pursue a claim against the phantom driver through his own UM policy.
If Stan did not have UM/UIM coverage, he could be out of luck. If Stan has health insurance, he could potentially get his medical bills paid, but he would not have a remedy for his damages against the phantom driver.
What is the bottom line?
If you drive an automobile, you should absolutely have UM/UIM coverage for you and members of your household. If a person is injured and does not UM/UIM coverage, as one can see from the above examples, the person can be out of luck trying to obtain a remedy for their injury claim! UM/UIM coverage is worth the minimal extra premiums in Washington state. A small investment in a UM/UIM policy is valuable as it can provide extremely important and necessary protections for drivers and passengers.