My Car Insurance Coverage: Part I

These limits can be problematic as many accidents result in damages which exceed these limitations. For questions concerning your own liability limits, this information is generally located on a “Declarations Page” of your insurance policy. [vii]

Uninsured Coverage (UM)

 In addition to the required minimum liability insurance, Missouri law also requires a minimum amount of “uninsured” motorist coverage of $25,000 per person and $50,000 per accident for bodily injury.viii]  This is not a separate policy or provision that the insured has to purchase, as an insurance company cannot issue a contract of automobile liability coverage in Missouri without including uninsured motorist coverage on the policy.[ix] Whether issued by the same insurer or different insurers, the public policy expressed in the statute mandates that each automobile liability policy contain at least the statutory minimum amount of uninsured motorist coverage.[x]

Uninsured motorist coverage, in contrast to liability coverage, is related to insured individuals rather than specific vehicles.[xi] Accordingly, uninsured motorist coverage protects against bodily injury caused by an uninsured motorist’s negligence.[xii]

This type of insurance coverage provides protections for Missouri drivers who are injured in a car crash with another individual who either does not have car insurance themselves, maintains liability insurance from a different state where the required minimum limits are less than those required in Missouri[xiii], or flees the scene of an accident, or a hit-and-run, and thus is unidentifiable. Essentially, uninsured motorist statutes are designed "to give persons who are injured by financially irresponsible motorists the same protection they would have had if they had been involved in an accident caused by a financially responsible motorist."[xiv] However, the “hit and run” scenario is the most common event which brings about the activation of uninsured coverage. When a motorist is uninsured or underinsured, the injured party's only hope for recovery may depend on her own insurance policy.[xv]

For example, Jeff is traveling westbound on Chippewa street after just picking up frozen custard from Ted Drewes, which he concretely placed in the passenger seat before safely departing from the parking lot. As he continues down Chippewa, he is abruptly T-boned by Casper, who had run a red light at the Chippewa- Jamison intersection.  Casper, who has no interest in sticking around the scene of an accident, flees south on Jamison disappearing out of sight. Before Jeff can figure out what happened, Casper is gone and there is spilled custard all over his car.

In steps a lawsuit against an “uninsured” motorist. In Jeff’s lawsuit against Casper, he will be suing what insurance companies call a “phantom” vehicle, as Casper vanished from the scene, leaving Jeff without any idea who Casper was or more importantly what liability coverage he had.  Jeff will ultimately be suing his own insurance company for the uninsured policy limits which he has purchased through his overarching liability coverage.

Underinsured Coverage (UIM)

The third type of insurance coverage is what is called “underinsured” motorist coverage. Unlike the previous two examples of liability and uninsured coverage, Missouri does not require drivers to maintain any underinsured motorist coverage at all. However, Missouri insurers typically make such coverage available: each of the ten companies with the largest market shares together representing over two-thirds of the market sells underinsured motorist coverage.[xvi] However, since underinsured coverage is optional, the Missouri law of contracts governs coverage disputes.[xvii]

Underinsurance coverage is floating insurance that follows the insured rather than a particular vehicle.[xviii] Therefore, maintaining underinsured motorist coverage allows an insured party to recover from their own insurance company when the damage sustained from an accident exceed the liability limits coverage of the negligent party. Thus, when a tortfeasor is liable for damages in the amount greater than their liability insurance, the injured party may rely on their own underinsured motorist coverage to help alleviate the financial burden resulting from the negligent persons’ inadequate liability coverage.[xix]

For example, if an insured party suffers a $50,000 in damages, and the negligent party maintains a $100,000 of liability insurance, the injured party is not underinsured.[xx] However, if that negligent party maintains the state minimum liability insurance, $25,000 as mentioned above, then that insured party is underinsured in the amount of $25,000.[xxi]