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Underinsured Motorist Coverage In Massachusetts – What You Need To Know

What is Underinsured Motorist coverage?  Underinsured Motorist coverage provides insurance coverage to you if you are injured in an automobile accident in Massachusetts by a driver whose insurance isn’t enough to cover your damages. Not to be confused with uninsured motorist coverage, Part 12. of the standard Massachusetts Automobile Insurance Policy states,

Sometimes an owner or operator of an auto legally responsible for an accident is underinsured.  Under this Part, we will pay damages for bodily injury to people injured or killed as a result of certain accidents caused by someone who does not have enough insurance.”

Do I need Underinsured Motorist Coverage?  First, it is important to understand that Underinsured Motorist coverage (or “UIM”) is optional.  It is not required in Massachusetts, or to use insurance industry lingo, it is not “compulsory”.  So, if you want your auto insurance policy to include Underinsured Motorist coverage, you must let your insurance company or insurance agent know.  It will increase your insurance premium a bit; but in tough economic times, it is far better to protect yourself from catastrophic loss by including UIM and not simply selecting the bare minimum coverage as a lot of Massachusetts drivers do.

How Does Underinsured Motorist Coverage Work?  If you have Underinsured Motorist coverage and are injured in an auto accident in Massachusetts, your insurance company will pay you for damages including medical bills, lost wages and compensation for pain and suffering if your Underinsured Motorist coverage limits are greater than the liability limits of the driver that caused the accident.  Picture this scenario:

commerce-acts-books-477966-mYou are driving north on Route 1 in Saugus, minding the speed limit and staying in your lane. You continue north on Route 1 and head into Peabody, approaching the traffic light near Santarpios.  The light is red.  You stop for the light.  After you stopped and without warning, the driver behind you doesn’t notice that you have stopped for the red light (probably texting!) and WHAM – you are rear-ended and badly injured.  Your injuries result in severe pain and suffering and require you to seek expensive hospital tests and medical treatment and you lose time from work, eating up your vacation time, all through no fault of your own.  Let’s say that your damages, including out of pocket bills for medical care and lost wages total $50,000.00 and

  • The driver that caused the accident has the minimum liability coverage allowed by the Commonwealth of Massachusetts, which is $20,000.00 per person; BUT
  • You have $100,000.00 per person in Underinsured Motorist coverage under your own auto policy.

In this case, you would first make a claim for the $20,000.00 from the other driver’s liability coverage.  Then you would make an underinsured claim against your own auto insurance company for $30,000 – or the difference between the total amount of your damages less the at- fault driver’s liability coverage.  You cannot, for example, collect the maximum $20,000.00 from the other driver and then seek $50,000 through your Underinsured Motorist coverage.  This would be a total recovery to you of $70,000 when your damages total $50,000.00.  You are not permitted a double recovery.  The Massachusetts auto policy’s UIM section describes it this way:  “We will reduce the damages an injured person is entitled to recover by 1. the total amount collected from the automobile bodily injury liability insurance covering the legally responsible owners and operators of all insured autos…”  but you can be compensated from the other driver plus your UIM up to your actual damages.

How to Decide Whether Underinsured Motorist Coverage is Right for You?  In order to determine whether or not Underinsured Motorist coverage is right for you, you should consult with your insurance agent or insurance company and understand your coverages and the costs and risks associated with them.  Underinsured Motorist coverage is designed to protect YOU when someone else is at fault and has only the minimum coverage.  If you have any questions about your coverage or the damages you have suffered in an automobile accident through the fault of another driver, or need help in analyzing your rights under any UIM coverage in your policy, we suggest that you consult an experienced Massachusetts personal injury attorney.