Transactional/Litigation Law Blog

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McNeill, P.C.


Posted on Thursday, July 25, 2013 by Giovanni  Regina

Underinsured/Uninsured Motorist Insurance Coverage is one of the most important types of coverage in an auto policy.  Besides basic coverage, all auto policies are required by New Jersey law to have underinsured/uninsured motorist coverage in the minimum amount of $15,000 per person/$30,000 per accident.   However, this minimal coverage may not be enough. If you want to protect yourself and your family, you may want to consider increasing your limits of uninsured/underinsured motorist coverage.

What is Uninsured Motorist Insurance Coverage?

Uninsured motorist insurance coverage under your own policy is for when a person who has no insurance (responsible party) causes an accident with you.  If this occurs, you then pursue your own policy for the damages caused by that uninsured person. Uninsured motorist insurance also covers the situation of the hit and run driver where you are never able to identify the vehicle that hit you - the phantom vehicle situation.

What is Underinsured Motorist Insurance Coverage?

Underinsured motorist insurance coverage is for the situation where a responsible party does not have adequate insurance to cover the full amount of damage or injury caused to you. This is probably the most important auto insurance you can have because the vast majority of those driving on the roads today do not have adequate insurance to cover accidents or injuries caused by negligent driving.  Liability coverage under your own policy is important, but it does not protect you if someone without enough insurance causes damage to you. If someone with only $15,000 in insurance causes an accident and permanently injures you, this will not be enough to take care of you and your family.  If, however, you have another $500,000 in underinsured motorist coverage, then you at least have that extra cushion of protection.

Who is usually included in uninsured/underinsured motorist coverage?

Generally, uninsured/underinsured motorist insurance coverage will include the named insured (person who has the insurance policy) and the family members who reside in his or her household. Usually, the injured insured person and/or family member must be a passenger in the vehicle, a pedestrian injured by the vehicle or the driver of the vehicle in the accident. In the past, some insurance policies excluded coverage for the insured’s family members. However, these types of exclusions have been found invalid by most state laws. The only time such an exclusion is valid is if the family members already have a separate insurance policy of their own. Along these lines, an insurance policy may not exclude a family member of the insured who is not covered by the policy, but who is injured while in an automobile that is owned by a family member who is covered by the insured’s insurance policy.

Most states have statutes that require insurance companies to offer uninsured or underinsured motorist coverage as a part of each automobile/vehicle insurance plan. In most jurisdictions, an individual may be considered underinsured when his or her insurance policy coverage is not sufficient to cover the amount of damages for which he or she may be liable due to an accident or other event covered by his or her policy. In other jurisdictions, a person is considered underinsured when his or her insurance coverage maximum is less than the coverage maximum of the other individual’s (non-responsible) policy. Of course, uninsured persons are those that do not carry automobile liability insurance.  Again, the purpose of uninsured/underinsured motorist coverage is to protect against situations where one party to the accident does not carry enough insurance or does not carry insurance at all. Therefore, the intent of mandatory uninsured/underinsured motorist coverage is to protect people against monetarily irresponsible individuals who have injured others, due to their own fault, while operating an automobile. If the uninsured or underinsured individual is not at fault, most underinsured/uninsured motorist policies will not apply.

A minimum of $500,000 in uninsured/underinsured motorist coverage should be considered either through the automobile insurance coverage, if offered, or by means of a personal umbrella insurance policy.

Uninsured/Underinsured Motorist Coverage in Umbrella Policies

Most property-casualty insurers offer personal umbrella liability insurance along with their standard policies. However, it is possible to buy personal umbrella liability coverage through a company separate from your primary insurer. Premiums for umbrella liability insurance still are considered relatively inexpensive.  Like other insurance, prices may vary by geographic area, and not all carriers underwrite this type of coverage.  Prices also may increase based on the types and number of risks that are added to the policy.

However, many umbrella policies fail to cover all aspects of the coverage found in the underlying automobile policy.  For instance, umbrella coverage for uninsured motorists often needs to be purchased at an added charge. However, this additional charge is clearly worth it for the added protection it affords you and your family.

For more information, please feel free to contact Giovanni Regina at or by phone at 201-319-5743.


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