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Importance of Underinsured Motorist Coverage

Posted on Wed, Mar 07, 2012 @ 08:06 AM

Michael L. Gayby Mike Gay

Are you "really" covered?  You might be surprised.

When obtaining automobile insurance coverage it is critical that you request from your agent uninsured/underinsured motorist coverage. Ohio law has changed and the insurance company is no longer required to offer this coverage to you.  As a result, many are unaware of this coverage, and fail to obtain what is probably the most important coverage for your well-being, and that of your family.

If you are seriously injured in a vehicular accident, and the individual who caused the accident has insurance coverage of the State minimum of $12,500.00, the amount you can recover for your wage loss, medical bills, and pain and suffering is limited to $12,500.00, unless the individual who caused the crash had significant other assets, which is typically not the case.  The only way to protect yourself and your family is to have significant uninsured/underinsured coverage. 

For example, if your damages total $250,000.00, and you have underinsured motorist coverage of $500,000.00, you can obtain $12,500.00 from the insurance company of the person who caused the crash, and the balance of $237,500.00 from your own carrier pursuant to your underinsured coverage. 

It is also important to understand the concept of subrogated medical expenses.  Subrogation is a term in your health insurance policy which means that you must reimburse the carrier for the medical bills it paid if you recover money from a third party or his insurance company.  In the past you were entitled to be reimbursed first for your damages, and once you were fully compensated, the health insurance company would be repaid. 

The Ohio Supreme Court has changed Ohio law and held that the health insurance company gets paid first.  Assume that your underinsured motorist coverage is $50,000.00, and once again your claim is worth $250,000.00.  If your medical expenses alone total $50,000.00, your health insurance company, pursuant to the concept of subrogation, is entitled to be repaid in full before you receive any funds.  Accordingly, assuming you had only $50,000.00 in underinsured motorist coverage, all of that money would go to repay your health insurance carrier, and there would be no money available to adequately compensate you and protect your family.  As a result, purchasing an adequate amount of uninsured/underinsured motorist coverage is important.

Tags: Underinsured Motorist Coverage, Ohio Law, State Minimum Coverage, Subrogated Medical Expenses