Practically speaking, it is hard to find the time to stop and think about your automobile insurance coverage limits and how such limits can affect your life in the future. In practicing as a plaintiff’s personal injury attorney over the years I have listened to many tragedies involving automobile, trucking and busing collisions. Some of the hardest stories to hear in my field involve catastrophic injuries with little or no insurance coverage to help cover the burden of medical expenses and other expenses associated with such serious injuries. Either the culpable driver who hit my client is uninsured or under-insured. More often than not, I am forced to explain to my clients only how they can protect themselves and their families in the future because they do not have any or enough protection for the current tragic occurrence we are discussing. When I begin to discuss protecting themselves and their families, I immediately start discussing automobile insurance limits and how to properly select such limits to get the most coverage possible to prepare and be ready for the “what ifs” we could all encounter in this regard.
It is important to know that Illinois sets a minimum requirement for insurance policy limits for motor vehicles driven in Illinois as follows: $20,000 insurance policy for any one person in a motor vehicle accident for bodily injury or death; $40,000 is required for the bodily injury or death of two people in a motor vehicle accident; and $15,000 for property damage or injury to another person’s property. 625 ILCS 5/7-203 (2006).
There is also the Uninsured and Hit and Run Motor Vehicle Coverage (215 ILCS 5/143a) and Additional Uninsured Motor Vehicle Coverage sections (215 ILCS 5/143a-2), which mandate uninsured motorist coverage in most situations where a policy of vehicle insurance is issued. The purpose behind this mandated uninsured motorist provision is that the driver who bothered to purchase insurance coverage and follow the law will be placed in the same position he or she would have been in had the uninsured driver had minimum coverage. This coverage is typically referred to as UM coverage and solely covers an Illinois driver who is struck by an uninsured driver.
However, there also exists underinsured motorist coverage, typically referred to as UIM coverage. This coverage is a protection to ensure that if a culpable driver who strikes you carries lesser limits than you, you get the difference between the two policy limits, i.e., if you carry $100,000 in UIM coverage and the other driver carries $20,000 , upon tender by the liable driver’s carrier of the $20,000, you can seek an additional $80,000 from your own carrier, if the damages so warrant such an award. Obviously, any monies you recover from the culpable driver acts as a set off against any monies you can receive from your own carrier to prevent a “double recovery” situation. However, if your uninsured/underinsured (UM/UIM) coverage has the same policy limits as the culpable driver who struck you, you are provided no additional coverage for your injuries. Since most Illinois drivers likely carry $20,000 - $100,000 in liability/bodily injury coverage, it is important that you carry an amount in excess of that to ensure you are provided that additional coverage you or your family may need.
While I am not an insurance agent and do not profess to be, it is worth it to consider purchasing an umbrella policy well in excess of typical carried liability limits to be sure you are covered. Many umbrella policies can be tied to your homeowner’s or renter’s insurance policy as well, “to kill two birds with one stone,” so to speak. In that situation, the umbrella policy is applicable to a homeowner’s claims or automobile claims. The cost for umbrella coverage is minimal in comparison to the benefit it can provide. Umbrella policies can be written for $1 million and greater. With such an umbrella policy in place, you need not be concerned with the coverage of the culpable driver who collided with you but in under- or uninsured. If for some reason an umbrella policy is not an option, increase your UM/UIM limits as high as your insurance carrier will offer.
It should be noted that liability must be proven to seek insurance coverage pay-outs, but even if you are liable in a collision, your umbrella or UIM coverage may be utilized to cover the passengers in your vehicle. Also, in the unfortunate event that you were to cause an accident which resulted in serious injury, your umbrella coverage would cover the person you injured.
Do not face these issues for the first time when tragedy strikes and wish you had addressed your automobile insurance policy limits sooner. Plan ahead and put yourself and your loved ones in a position of safety and protection. Hopefully, you will never need such extensive coverage, but in the event of the tragic “what if,” you will not need to ponder the “shoulda, woulda, couda” in relation to your auto insurance coverage.
* Stephanie K. Nathanson is a Partner at the law firm of Fiedler and Nathanson at 30 W. Monroe Street, Suite 800, Chicago, IL 60603, Phone: 312-263-9090 Fax: 312-277-9099, www.fandnlaw.com.