What Happens if I’m Injured by a Driver with Minimal Auto Insurance?

People injured in Michigan car accidents caused by an at-fault driver with minimal auto insurance may have a right to recover underinsured motorist benefits from their own insurance policy.

Sometimes the at-fault driver’s insurance policy may not provide enough coverage to fully compensate the victim. In fact, Michigan drivers can carry as little as $50,000 worth of coverage to compensate someone injured or killed as a result of their negligence.

If the injured person has underinsured motorist coverage on their own auto insurance policy and the at-fault driver’s policy does not have enough coverage to fully cover the injured person’s damages, the victim can pursue that uncovered portion of their damages through an underinsured insurance claim with their own auto insurance company. This is similar to pursuing an uninsured motorist claim against a driver who has no insurance at all.

Also, it is possible that if the injured person does not have their own underinsured motorist coverage but was a passenger in a vehicle that was covered by underinsured motorist coverage, the injured person may be covered under that policy.

Because of the state’s low mandatory minimum insurance requirements, Michigan drivers should always consider purchasing underinsured motorist coverage. While underinsured motorist coverage is optional, it protects you and your family in the event you’re in a crash with an underinsured driver who has lousy and inadequate coverage.

West Michigan car crash lawyer, Tom Sinas, explains the important protection of underinsured motorist coverage in a recent Fox 17 “Know the Law” segment

What damages can be recovered in a Michigan underinsured motorist claim?

The damages that can be recovered in an underinsured motorist claim are typically damages that can be recovered against an at-fault driver that exceeds the at-fault driver’s liability insurance coverage. These damages can include pain and suffering and loss of enjoyment of life suffered as a result of their injuries. It’s important to note that under Michigan law, pain and suffering damage claims are subject to special rules and are not available to those who are not seriously injured.

Furthermore, the damages recoverable in a Michigan underinsured motorist claim can also include claims for expenses that exceed the amount of PIP benefits allowed under the injured person’s own Michigan no-fault insurance policy. Michigan residents injured in auto accidents can typically recover personal protection (PIP) benefits from their own insurance company, regardless of who was at-fault for the crash. These benefits include coverage for medical expenses and up to three years of coverage for the injured person’s medical expenses and income loss claims are payable through Michigan no-fault insurance coverage. Those medical expenses and income loss claims are not recoverable in the Michigan underinsured motorist claim.

However, if the injured person has medical expenses that exceed their capped no-fault medical expense coverage, or if the person has income loss that exceeds the three years of income loss available through tier no-fault insurance coverage, those excess medical expense or income loss claims can be pursued through an underinsured motorist claim.

Non-residents injured in auto accidents no longer have any right to no-fault PIP benefits, unless they happen to own a vehicle that is registered in Michigan and insured with Michigan auto insurance. Otherwise, non-Michigan residents have to pursue all their damages from the at-fault driver. Therefore, when the at-fault driver has minimal insurance, it is even more important for the non-Michigan resident to pursue any underinsured motorist claims they may have available to them for their injuries.

Underinsured Motorist Claims – Rules & Conditions

It’s important to know there are certain strict rules that must be followed so underinsured motorist claims are not jeopardized. For example:

• Underinsured motorist policies typically require that the injured person completely exhaust the negligent party’s liability limits before pursuing the claim for underinsured motorist coverage. Let’s put this into context: Mark is injured by a distracted driver who ran a stop sign. His injuries are extensive. He pursues a liability claim against the negligent driver’s auto insurance. However, he, unfortunately, discovers the other driver has a policy of only $50,000 in liability coverage. His injuries and the care they require are far and away higher than that amount. He must first use the entire amount of the liability claim from the at-fault driver’s insurance before turning to his own underinsured motorist coverage benefits to pay any outstanding costs.
• Most underinsured motorist policies require that the injured person obtain written consent from his or her own insurance company before settling with the negligent party.

In order to pursue a claim for underinsured motorist benefits, injured parties may need to meet additional conditions as well. One important condition to remember is a short time period to notify the insurer of the claim. Failure to follow the policy conditions can result in the loss of underinsured motorist benefits. Therefore, extreme caution is necessary to protect these claims.