Have you gotten a letter from your auto insurance provider recently? If so, you might be confused about what it says and what you should do about it to keep yourself covered in case of a serious car accident with an underinsured motorist.
You might have heard that the Virginia General Assembly passed a law changing how underinsured motorist (UIM) collision insurance is handled. That law goes into effect on July 1. It could significantly affect how much you can receive in damages if an underinsured driver is responsible for a wreck that causes you significant injuries.
The old rule for UIM insurance compensation
Before the new law, if you were injured in a collision with a driver who was at fault but whose insurance coverage wasn’t enough to compensate you for damages, the amount your own UIM insurance coverage would provide you was subtracted by the amount the other driver’s insurance would cover.
For example, say a drunk driver hits you and causes $50,000 in medical bills and lost wages. The driver’s liability insurance only covers up to $30,000 – the current statutory minimum coverage. Under the soon-to-be old system, you would file a claim under your insurance’s UIM coverage and receive $20,000 ($50,000 minus $30,000). Since Virginia motorists are required to purchase UIM coverage, they are essentially paying for more insurance than they are receiving. It also would sometimes lead to innocent accident victims receiving less compensation than they deserved.
The new law, and how insurance companies are reacting
That goes away starting July 1, 2023. Under the new law, you are entitled to as much of your UIM coverage as you can claim in damages, regardless of how much the other driver’s insurance can provide. Insured drivers will be better protected from financial damages and get better value for their premiums.
This is where the letter from your insurance company comes in. Many insurance companies are asking their customers to reduce their UIM coverage in exchange for lower premiums. Whether you do so is up to you, but be aware that if an uninsured or underinsured motorist injures you or a loved one, you might not receive as much compensation if you choose the reduced coverage.
Compensation after a terrible car accident
After a major car accident, you might have a hard time getting rightful compensation taking on the insurance company by yourself. A skilled personal injury attorney who knows how auto insurers operate can help you reach a reasonable settlement figure or trial verdict.