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The driver who hit me only had $20,000 in insurance, now what?

September 22, 2015 by Steven M. Gursten

What do you do when the driver who causes a car accident only has $20,000 in coverage?

This sadly happens all the time. Remember, most people who are insured (and in some cities like Detroit approximately 50% of drivers have no auto insurance at all) only have the minimum bodily injury policy limits of $20,000 if they cause a motor vehicle accident. That means that if these people have no collectible assets, that’s usually all that an attorney can recover for an auto accident victim.

Sure, a lawyer can still file a lawsuit and get a big judgment for someone. But the costs to prove this then come out of the accident victim’s total recovery.

I recently received a question from a reader who was injured in a serious car accident, but the driver only had the typical insurance policy limit to cover bodily injury of $20,000 per person and $40,000 per accident.

Q. I’m learning really fast that the bodily injury coverage isn’t for your benefit, it’s for the not at fault party. In our case, the person who caused the accident a had only a $20,000/$40,000 policy. It’s a real joke considering the pain and hardship the accident – which was their fault – caused in my life.

A. I’m so very sorry to hear about your car accident. Unfortunately, your experience is a great reminder to everyone about why uninsured and underinsured motorist coverage (UM/UIM) is so important.

Uninsured and underinsured motorist coverage provides a valuable source of legal recovery after a car accident, when someone is injured by another driver who is uninsured or does not have adequate insurance. With UM/UIM, an injured person turns to his or her own auto insurance company to pay what would have been recovered from the at-fault driver, had that person been properly insured with an insurance policy limit to cover their injuries.

People often make the mistake of thinking the bodily injury coverage they purchase for themselves will cover them in case they’re injured in an accident. They don’t understand that it’s really to protect another driver in case you cause an accident. So it’s important to remember that the amount of pain and suffering compensation you can receive for your car accident injuries is limited to the insurance policy of the other driver who caused the crash.

To combat this, we recommend in the future that you carry at least $250,000/$500,000, in uninsured and underinsured motorist coverage, so you don’t have to rely on other drivers in case of a crash. UM and UIM is also surprisingly inexpensive. Think of it as the cost of a movie and popcorn to properly protect you and your loved ones if a terrible automobile accident does occur.

The other case you have after a car accident is for your Michigan No Fault benefits, which cover your medical care, lost wages and other important services like house cleaning and in-home nursing care. You can receive No Fault benefits if you’re injured in a car accident, regardless of who caused the crash.

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