What happens when the at fault driver in a roadway collision is un-insured or under-insured

In South Carolina, car drivers are required by law to carry a minimum amount of liability insurance coverage for the protection of their passengers and others on the roadway:   $25,000.00 per person for bodily injury; $50,000.00 aggregate per accident; and $25,000.00 for property damage (25/50/25). Large, commercial Tractor Trailers must carry a minimum of $1,000,000.00, mandated by federal law.

If you are in a serious auto collision with injuries, it doesn’t take long to incur medical bills over South Carolina’s minimum limits of $25,000.00. The average EMS bill for an average run to the hospital is about $500.00. Once you make it to the emergency room, there will be separate bills for the facility, ER physician, and radiology.   A typical visit to the ER with basic diagnostic studies such as x-rays to rule out fracture, will cost about $2500.00.   Based on your symptoms, the ER Physician may see it necessary to take MRI scans of various parts of your body, at around $1500.00 per scan.   We have seen ER bills with multiple MRI scans in the range of $12,000.00 to $20,000.00; and that’s just the first treatment.

Those expenses do not include follow up care with a chiropractor, orthopedic specialist, physical therapy, or additional diagnostic studies.   The numbers can add up to a very large figure, very quickly, surpassing the minimum limits of liability insurance coverage a person may have on their car when they hit you; and that’s assuming they even carry insurance.   Many drivers have no insurance in place. So, it’s no surprise that injured parties find themselves in situations where the at-fault party lacks insurance, or where the at-fault party does not have enough insurance to cover your bodily injury damages and/or property damage to your belongings and vehicle involved in the collision.

Mandatory Minimum Limits UN-insured Motorist Coverage (UM)

Just as South Carolina requires drivers to have a minimum amount of liability insurance coverage to protect other drivers, our legislature has mandated through statute that every auto insurance policy issued in the State of South Carolina must carry a minimum of 25/50/25 in UN-insured motorist coverage to protect people from at fault drivers carrying no insurance.   You may purchase from your carrier additional, optional un-insured motorist coverage, up to the level of insurance coverage you have for liability coverage on the policy.   So if you carry 100/300/50, you can have UM in amounts up to that amount. If you have more than one vehicle on the policy, you can stack coverage together.   For example, if you had 3 vehicles on the policy in the household, you would effectively have 300/900/150 in UM coverage.   There are exceptions that go beyond the scope of this article, such as when the vehicle involved in the collision carries less coverage than the other vehicles on the policy; or when an “insured” on the UM policy is riding in another vehicle at the time of the wreck etc…

When a vehicle hits you and leaves the scene, if there is property damage to your vehicle, you can file a “John Doe” claim on your UM policy.   If you are run off the road by another vehicle, and an independent witness sees it happen and prepares an affidavit, you can file a claim on your UM policy.   And there are unusual circumstances, such as when a person uses a vehicle as a “gun platform” an shoots another person from a vehicle, our South Carolina Supreme Court has held that the person’s injuries from the shooting are covered by UM coverage.   There are many factual circumstances leading to UM claims in South Carolina.

Optional UNDER-Insured Motorist Coverage (UIM)

In instances in which your bodily injuries and/or property damages exceed the amount of liability insurance coverage held by the at-fault party, you can make a claim on your own policy for UNDER-insured motorist coverage (UIM), if you have it. UIM coverage is optional coverage, not mandated by law like UM.   Similar to UM, with UIM, you may elect amounts of UIM coverage up to the limits of your liability coverage.   The elements of damages in a personal injury claim include medical bills, lost wages, pain and suffering, mental anguish, loss of enjoyment of life, alteration of lifestyle, and permanent injury.   Therefore, even though your medical bills do not exceed the amount of liability coverage an at-fault party may be carrying, you can still find yourself very easily in a situation where you need to file for UIM coverage.   This applies even if you are as passenger in another person’s vehicle who has UIM, but you have no personal UIM on your own auto policy.

The liability carrier will agree to “tender” it’s liability coverage limits to you, only if you sign a Covenant Not to Execute against the personal assets of the at-fault driver. This protects the at-fault driver from personal exposure, but allows you to sue to at-fault driver in court, only for the purpose of obtaining additional liability coverage the at-fault may be carrying, or UIM coverage on your own policy.   Your insurance company will hire legal counsel to make a “Notice of Appearance” on behalf of the at-fault driver, to protect the carrier’s financial interests; yes, your own carrier can become adverse to you in a UM, or UIM claim situation. Many UM and UIM claims are resolved without a lawsuit, but in some instances where there is a disagreement over the value of the claim, suit may need to be filed to develop the facts further to prove the amount your case is worth.

In some instances, the same insurance company that insures the at-fault driver will insure you or your family members; so it is not unusual to have the same auto insurance carrier tender it’s liability limits in return for a Covenant Not to Execute, then turn around and have another adjuster handle the UIM claim(s) from the collision.

The Bottom Line Lesson

Carry as Much UM and UIM as you can afford. The incremental increases in coverage per thousand cost less and less as you increase UM and UIM coverage.   This is the only way to protect yourself from un-insured and under-insured vehicles on the roadway, which unfortunately, pose a risk to you and your family every time you all head out onto the roadways.