Understanding Uninsured & Underinsured Motorist

Maine insurance laws require the purchase of auto liability insurance for your car to legally be on the road. This is Maine's Financial Responsibilty Law. The importance of liability insurance is to protect your assets in the event you are held liable for an accident resulting in damages and to ensure those damages are paid.

The auto insurance policy is broken down into four parts:

Part A : Liability Coverage

Part B : Medical Payments

Part C : Uninsured/Underinsured Motorist Coverage

Part D : Damage to Your Auto

In Maine you are required to carry parts A, B and C if you are using an insurance policy to comply with the law.

Part A covers your liability for bodily injury and/or property damage to others. The minimum you can carry is $50,000 bodily injury person, $100,000 bodily injury per accident and $25,000 property damage. You could also opt for one combined limit for all damages at a minimum of $125,000.

Part B is to cover reasonable and necessary medical expenses for people in your car, regardless of fault. The limit is for each person. The minimum allowed is $2,000.

Uninsured/Underinsured Motorist Coverage, Part C, is very important. It's liability protection for you and people in your car when you are injured due to an uninsured or underinsured driver. **This is not for damages to your auto, but for actual physical injuries to a person**

We typically see clients purchase higher than the minimum limits of liability under Part A, and when you do that, you should match the limits under Part C. If you don't, you can be giving up your underinsured motorist coverage protection.

Even though Maine law requires drivers to have insurance (or be bonded) not all drivers on the road are insured. What could happen if someone who is not insured hits you and causes you injury? You could still put in a claim under your Part B - Medical Payments, but that only pays for your necessary medical expenses. You can't receive reimbursement for your time off work or your pain and suffering.

This is where Part C becomes important. If an "uninsured driver" as defined by your policy hits you and causes injuries to you and your passengers you can put in a claim for damages under your own policy for what you could have been paid under their own Part A coverage, had they had a policy.

So why should your Part C limits be higher than the state minimum limits? In order to put in a claim for underinsured motorist coverage you have to prove two things:

1. That you were hit by another driver and they caused your injuries and

2. That your limits of uninsured motorist are higher than their limits...

In this case your policy will pay the difference between their limit and your damages, up to your policy limit.

So for example, if you were hit by a driver who had the minimum limits of 50/100/25 but you were seeking $125,000 in damages for yourself their policy will only pay you $50,000 - the maximum for any one person. But if you have an auto policy with Part C limits of 100/300, you can seek additional recovery under your policy. Your policy would pay you an additional $50,000 to bring you to your total limit of $100,000 per person.

There are of course terms and conditions within the policy that you must comply with, so read your policy to understand restrictions, but this is great coverage for everyone out on the road.