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What is “Underinsured Motorist Coverage”, and How Could it Affect Me? David L. Duff of Duff & Kronfeld, P.C. posted in About the Law on Wednesday, January 20, 2016.

If you are injured as a result of an automobile accident, and the negligent driver has no insurance, you are entitled to pursue compensation for your injuries under the “uninsured motorist” provision of your own automobile insurance policy. However, what happens if the negligent driver does carry automobile insurance coverage, but only in the minimum amount required by the Commonwealth of Virginia, namely, $25,000?

Under Virginia negligence law, a driver is deemed to be an “underinsured motorist” if the amount of liability insurance coverage carried on his/her automobile is less than the amount that you carry under your automobile insurance. In such a situation, the negligent driver’s insurance becomes primary, and your own insurance becomes secondary, or backup, to the extent that it exceeds the amount of primary insurance.

Here is how it works:

Assume, hypothetically, that you carry automobile insurance on your vehicle through GEICO; and, that you have bodily injury liability coverage of $100,000 per occurrence. You are, then, rear-ended by a driver whose vehicle is insured through Allstate, but with bodily injury liability limits of only $25,000. Assume, further, that the severity of the collision herniates a disc in your low back, which, after months of physical therapy and other conservative treatment, requires surgery. You incur medical bills totaling $30,000, and miss 3 weeks of work recuperating from the surgery. Your attorney evaluates your claim, and informs you that you should be able to realize compensation of $90,000 through a settlement.

Under such a scenario, Allstate would, most likely, promptly offer its full $25,000 policy limits to settle the case. However, since your own insurance with GEICO ($100,000) exceeds the amount of insurance coverage the negligent driver had with Allstate ($25,000), you are entitled to pursue compensation from your own insurance company, i.e. GEICO, for the difference in coverage ($100,000 – $25,000 = $75,000). Therefore, in addition to the $25,000 of primary insurance offered by Allstate, you have up to $75,000 in additional funds available to you from GEICO to settle your claim. This is referred to as “underinsured motorist coverage.”

If you believe that you find yourself involved in an underinsured motorist situation, please contact one of the attorneys at The Duff Law Firm at (703) 591-7475.

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