Underinsured motorist coverage (UIM) is one of the most important types of coverage an individual can purchase. In a sense, it can be thought of as “gap” coverage in case you are injured by a negligent defendant driver. For example, if your vehicle is rear-ended by a driver who only has $25,000 in coverage (the Missouri state minimum) and you suffer a Traumatic Brain Injury (TBI), spinal injury or other serious or permanent injury, then you will be limited (except in very rare circumstances) to collecting the $25,000 from the defendant driver for your injuries although you may be out over $100,000 for your losses. However, you can purchase under-insured coverage from your automobile insurer often in amounts ranging from $100,000.00-$1,000,000. This coverage is relatively cheap and easy to obtain

Additionally, you need Uninsured Motorist Coverage in case you are injured by a driver who does not have any automobile insurance. Often times client believe they have “full coverage” insurance without knowing if they are fully protected. It is critical to have BOTH Uninsured and UNDERinsured insurance to protect you and your passengers.

Naturally, consumers believe that if they pay for uninsured (UM) and underinsured (UIM) motorist coverage as a part of their automobile policies, they will be covered in the event they are involved in an accident with another motorist who either doesn’t have insurance or who is underinsured. While this is partially true, you may not be covered to the extent to which you believe.

Recently, the Missouri Court of Appeals, Eastern District determined that a woman who was a passenger in friend’s car when an accident occurred in late 2009 could not recover any underinsured (UIM) motorist coverage from her own policy (written by Farmer’s Insurance Company) after the vehicle she was riding in was struck by an underinsured motorist who was found to be negligent. The woman was seriously injured, and while the negligent motorist’s liability insurance paid the victim for the limits of his coverage, she did not receive sufficient coverage to compensate for the damages she suffered. She also received a settlement from her friend’s insurance company (he also had UIM coverage), but her own insurance company denied her claim for the remainder of the damages.

Her Farmer’s Insurance Company automobile policy had an exclusion that made her ineligible for UIM coverage if the vehicle in which she was riding was owned by someone else who also had any amount of underinsured motorist coverage. In essence, because it was not her vehicle and the driver did have underinsured motorists coverage, she could not collect from her own insurance company for the remaining uncovered damages. The woman filed a lawsuit against Farmer’s based on reasonable expectations of coverage and what she perceived to be “ambiguities” in the policy, however she was denied. The courts upheld the exclusion in her Farmer’s policy.

What is truly ironic is that if the car in which she was a passenger had no underinsured motorists coverage, or had she been a passenger in her own vehicle, she would have been eligible to collect $250,000. The woman had paid premiums for an underinsured motorist protection policy providing limits of $250,000 per person/$500,000 per occurrence yet was unable to use it.

It is important to have your automobile policy looked over by an attorney who is experienced in insurance litigation in order to protect your rights. If you have been a victim of an insurance company that refuses to pay a claim without a legitimate or reasonable basis based upon the terms of your automobile insurance policy, it is recommended that you speak with a Kansas City attorney who is skilled and experienced in litigation against insurance companies pertaining to automobile insurance policies.