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July 6th, 2015

Philadelphia, PA Car Accident Law – What is the difference between UIM and UM coverage?

Underinsured/uninsured motorist (UIM/UM) coverage is one of the most important types of auto insurance coverage PA drivers should have. UIM/UM coverage protects insured Pennsylvania motorists when the at-fault driver’s vehicle is an underinsured motor vehicle or an uninsured motor vehicle.

Related: Learn about the statute of limitations in a UIM/UM case

Underinsured Motor Vehicle

PA’s Financial Responsibility Law defines underinsured vehicles as the following:

A motor vehicle for which the limits of available liability insurance and self-insurance are insufficient to pay losses and damages.

In other words, when at-fault drivers do not have sufficient liability coverage to financially compensate injured drivers/passengers for their injuries, they are underinsured. In such situations, injured drivers/passengers would file UIM claims with their own insurance companies. The amount they receive depends on the extent of their injuries and the amount of coverage purchased.

For example, Driver A causes an intersection accident on Walnut Street in Center City, Philadelphia after driving through a red light. Driver A hits Driver B who is seriously injured. Driver A only has $15,000 in liability coverage. Driver B sustains catastrophic orthopedic injuries and a permanent brain injury. Driver A’s liability coverage is insufficient to compensate Driver B’s injuries. Driver B has $100,000 in UIM coverage. After Driver B recovers $15,000 from Driver A, Driver B can make a UIM claim with his own insurance company. The maximum he may receive is $100,000.

Another situation where UIM claims are made is in multi-vehicle accidents. If Driver A has minimum liability coverage ($15,000), causes a multi-vehicle accident and seriously injures 3 other drivers, Driver A’s liability coverage is not going to be enough to financially compensate all 3 injured drivers. If the other 3 drivers have UIM coverage, they would make a UIM claim with their auto insurance companies.

Uninsured Motor Vehicle

PA’s Financial Responsibility Law defines uninsured vehicles as the following:

  • A motor vehicle for which there is no liability insurance or self-insurance applicable at the time of the accident.
  • A motor vehicle for which the insurance company denies coverage or the insurance company is or becomes involved in insolvency proceeding in any jurisdiction.
  • An unidentified motor vehicle that causes an accident resulting in injury provided the accident is reported to the police or proper governmental authority and the claimant notifies his insurer within 30 days, or as soon as practicable thereafter, that the claimant or his legal representative has a legal action arising out of the accident has insufficient liability coverage or the at-fault driver does not have liability coverage.

Therefore, there are 3 situations where Pennsylvania drivers may make a UM claim. The most common situations when an injured individual makes a UM claim are hit and run accidents where the at-fault drivers cannot be located or auto accidents caused by drivers who do not have any auto insurance.

For instance, Driver A causes a head-on collision in Northeast Philly and seriously injures Driver B. However, Driver A leaves the scene of the accident and the police cannot locate Driver A. Driver B has $100,000 in UM coverage. In this situation, Driver B may file a UM claim with his own auto insurance company because an unidentified driver caused the accident. If Driver B’s injuries and damages are $50,000, he may receive $50,000 from his auto insurance company. However, if Driver B’s injuries are $120,000, the maximum he will receive is $100,000 because that is the maximum coverage purchased.

As one can see from these situations, having UIM/UM coverage is crucial in helping the car accident victims financially. Many times, serious injuries prevent injured drivers from working. Being able to financially recover from a UIM/UM claim can make a world of difference to the injured victims and their families.

However, UIM/UM coverage is not mandatory in Pennsylvania. Because drivers do not realize the importance of this coverage, they often decide not to get UIM/UM coverage in exchange for a cheaper annual premium.

If you do not have UIM/UM coverage on your auto insurance policy, it is a good idea to call your agent and add it to your policy. If you are not sure whether you have UIM/UM coverage, call your agent to inquire.

Pennsylvania auto accident law is very confusing. There are many terms drivers commonly misunderstand. If there is a term you are not sure about, you can search our Philadelphia Auto Accident Insurance Glossary. If the term is not there, feel free to contact our experienced car accident lawyers.

Our firm is based in Philadelphia and has offices in 4 states. Please call the firm for more information.


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