An Attorney’s Take — The Importance of Having Uninsured Motorist Coverage & An Umbrella Policy

Written by: Rob Melchiorre, Esq. – 15 year practicing attorney with Keller, Melchiorre & Walsh

As a civil trial lawyer, I represent people who are injured or suffer property damage as a result of accidents. In this line of work, I see the financial consequences from the decisions people make from the type of insurance that they choose or decline to choose. If you have Auto or Homeowners Insurance, there’s a chance you have Uninsured Motorist Coverage (commonly referred to as ‘UM’), an Umbrella Policy, or both. However, if you are like most people, you’re probably not sure of the type of insurance coverage that you have. Unfortunately, most people learn the type of coverage that they have when it is too late.

If you do not have either of these insurances, I cannot emphasize enough that you speak with an attorney or an insurance agent about why these are worth the investment.

WHAT IS UNINSURED MOTORIST (UM) COVERAGE?

Uninsured Motorist coverage is a car insurance type that covers several types of expenses you incur if you are hit by a driver who is underinsured or who has no auto insurance at all. In addition, this insurance coverage can also cover the medical expenses of the passengers who are in the car with you during the accident.

In many states, Uninsured Motorist insurance is mandatory for all drivers. However, in Florida, this insurance coverage is not exactly required by law.

If you were involved in a vehicular accident caused by an uninsured driver, your UM insurance coverage can compensate you for the following:

• Medical Bills
• Funeral Expenses
• Suffering and Pain Compensation
• Lost Wages Due to The Accident

WHY IS IT IMPORTANT TO HAVE UM?

This coverage protects an individual’s financial assets from being afflicted due to costly medical expenses from vehicular accidents. In Florida, over 20% of the drivers on the road do not have insurance.  This means that if you are in an accident that is the fault of another driver, there is a 20% chance that they will not have any insurance.  Without any insurance all the expenses as a result of the accident will fall squarely on your shoulders.

Another large percentage of drivers in Florida have PIP only policies or $10,000 in bodily injury coverage. If a driver has a PIP only policy and causes an accident, there is no insurance coverage for the victim to recover.  If a driver has a $10,000 bodily injury coverage and causes an accident, then there is only $10,000 for the victim to recover.  This may seem like a lot of money, but a single trip to the hospital can easily exceed this amount and the victim will be financially responsible for the excess expenses.

Below are examples of expenses that illustrate why it is important to have Uninsured Motorist coverage.

• Save yourself from having to pay expensive medical bills.

Medical bills, especially from the treatment of bodily injuries caused by vehicular accidents, are significantly costly. Florida ranked first as the most expensive state to have an ER visit.  For this reason, having Uninsured Motorist insurance coverage is extremely important as it covers your medical bills from an accident caused by an uninsured driver.

• Be compensated for the trauma and suffering caused by the accident.

Uninsured Motorist coverage can compensate you financially for the trauma and pain caused by the accident. This means that on top of the medical bills, the coverage will also pay you for the physical and mental adversity you had to go through due to the incident.

• Get paid for the wages you’ve lost due to the accident.

If you cannot work as a result of an accident, whether it is for a few days or weeks, uninsured motorist coverage will pay for these lost wages or income. Usually, companies will not pay their employees for the days they were absent from work due to a car accident.

• UM can cover medical expenses for hit-and-run accidents.

Being a victim of a hit-and-run driver has more of a likelihood of happening than you might think. In fact, hit-and-run cases are prevalent in the United States. In fact, based on statistics, 682,000 hit-and-run incidents occur every year over the last decade.

Thus, having Uninsured Motorist coverage is very important as this insurance also pays for relevant expenses victims of hit-and-run crashes are subjected to pay.

WHAT CAN HAPPEN IF YOU DO NOT HAVE UM INSURANCE COVERAGE?

Not having this auto insurance puts you at risk of being financially obligated for all the necessary expenses incurred due to the accident caused by an uninsured motorist. Ask yourself the question of whether you would be able to miss work for a significant period of time and incur the additional financial expenses of unexpected medical bills. If the answer is no, then you need to have UM insurance.

WHAT IS A PERSONAL UMBRELLA POLICY?

An Umbrella Policy safeguards any existing personal assets, as well as probable future personal assets you have against the financial liabilities incurred due to losing a legal battle over a vehicular accident or an accident that occurred on your property.

Even if you are not a wealthy person, having an Umbrella Policy is important as it secures any of your current and future assets from the legal financial repercussions of losing a lawsuit. Your wages from work can be garnished by the court if you don’t possess any other assets to pay for the damages.

Moreover, an Umbrella Policy may cover the following financial liabilities:

• Medical Bills: An Umbrella Policy can cover the medical bills of the winning party who was involved in a vehicular accident on the other side with you, or who was in an accident on your property.
• Legal Expenses: An Umbrella Policy can cover the necessary legal costs incurred when you get sued.
• Other’s property damage: An Umbrella Policy will usually cover damages to another’s property as a result of an accident.

WHY IS A PERSONAL UMBRELLA POLICY IMPORTANT? 

Accidents happen. People are human and humans make mistakes. Although there was no intent to cause an accident, it occurred nonetheless. You can be held financially liable as a result of the accident. An Umbrella Policy not only covers car accidents, but a wide variety of other mishaps as well.  Another example would be if a person slipped and fell on your property and was injured as a result. An Umbrella Policy usually defamation lawsuit damages as well.

If you lose any of the said legal battles or lawsuits, you will be held liable to pay the other part for relevant costs including medical bills, lost wages, and legal costs, among others. And such expenses can be financially devastating. You work your entire life to accumulate your savings and wealth. Therefore, having a personal Umbrella Policy is crucial to any individual, regardless of whether you are wealthy or an average wage earner.

WHAT CAN HAPPEN IF YOU DO NOT HAVE A PERSONAL UMBRELLA POLICY?

If you lose in a lawsuit and the total cost for damages incurred is beyond the limits of your homeowner’s insurance or car insurance, you will be liable to pay for the remaining amount that is not covered by your insurance. Depending on the damage the accident has caused, the remaining uncovered amount can range between hundreds to thousands of dollars. This excess can be recovered through a variety of means including levying vehicles you own, freezing bank accounts, garnishing wages, foreclosing on properties, etc..

This all sounds scary, which it is. There are always discussions about planning for the future, planning for your retirement, planning for your children’s college fund, planning for a rainy-day fund, etc.  These are all important to plan for, but there is not nearly enough discussion and planning about protecting these assets.  Speak to an attorney or insurance agent to see if an umbrella policy is right for you and your family.

You can call Wiglesworth-Rindom Insurance at 561-637-2424 for a breakdown of your coverage and what Uninsured Motorist and an Umbrella Policy would look like for you!