An Example of Uninsured Motorists Coverage in Action

Uninsured motorists (UM) coverage is one of the most confounding aspects of car insurance. Most people outside of the insurance industry have never even heard of it, and even experienced agents are often unsure whether something is covered by UM or medical payments coverage. Add under-insured motorists coverage to the mix, and you have a whole ball of confusion. Hopefully, this example of UM coverage in action will shed some light.

Angry Amy

Amy was recently in an accident with a deer. Although the damage was minor, the cosmetic repairs cost over $3,000. Her other-than-collision (comprehensive) car insurance covered the costs, but only after her $1,000 deductible. Amy, who had always been a good driver, was furious that she spent over $150 per month on full coverage insurance, and then when it came time to file a claim, it still cost her $1,000. Although the claims agent was perfectly friendly, and the insurance company dutifully covered her claim, Amy decided to downgrade her insurance coverage to the legally required minimums. Now she was saving several hundred dollars a year, and she thought she had made a smart choice.

But later, Amy was in another accident, and this time she was at fault. While talking on her cell phone to her fiancé Brad, Amy momentarily took her eyes off the road and rear-ended another car. Although the damage was minor to both Amy's car and the other motorist's, Amy was legally liable for it all. Her car insurance covered the damages to the other driver's car, but as a result, her car insurance rates went up. Worse yet, by slamming on the breaks in her failed attempt to avoid the accident, she gave herself a bad case of whiplash.

Bad Brad, Unfaithful Faith, and Unlucky Linda

So where does uninsured motorists coverage come into play? Well later that week, Amy was supposed to pick up her sister Faith at the airport, but her whiplash made it uncomfortable for her to drive. She asked her fiancé Brad to handle the errand for her, and he was more than happy to do it since he and Faith had been having an affair.

So Bad Brad left to pick up Unfaithful Faith in Angry Amy's Audi, bashed-in fender and all. Unfortunately, while daydreaming of killing puppies and stealing candy from babies (Bad Brad really is evil), Brad rear-ended another car. This time, the damages were much more severe, and when the injured Linda staggered from her Lincoln Town Car, she recognized that auspicious Audi - it was the same car that rear-ended her earlier in the week!

So Whose Car Insurance Covers the Damages?

So whose car insurance covers the damages? Amy's? It was her car at fault, after all, and she did give Brad permission to drive it. How about Brad's? He was the driver, but… Bad Brad the Prince of Darkness doesn't have car insurance, so that rules him out. Clearly Unlucky Linda cannot be held accountable, so how about Faith? It was her fault, indirectly, right? Of course she can't be blamed, at least not legally speaking.

The answer is almost as convoluted as the question: Brad is the at-fault driver, so he is legally liable. However, since he doesn't have car insurance, Amy can be held responsible. In the meantime, Linda's car insurance will pay her medical bills, up to her policy limits, through her UM coverage. Her insurance company will then go after Brad and/or Amy (most likely Amy and her liability coverage) to recover their expenses. And finally, Unlucky Linda can sue both Brad and Amy (though probably not Faith) for any damages in excess of what insurance will cover.

The lesson? Don't skimp on your car insurance, and don't date men who drive without it - they'll probably cheat on you with your sister!