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April 5th, 2018

UIM & UM Claims in Pennsylvania – What’s the Time Deadline to File?

2017 Update: Pennsylvania Supreme Court Gives Plaintiffs More Time to File a UIM/UM Claim (Erie v. Bristol)

A November 2017 Pennsylvania Supreme Court case, Erie v. Bristol, turns Pennsylvania UIM/UM claim law on its head, in terms of the time deadline to file a claim. In a nutshell, the Erie ruling gives victims of car accidents who sustain serious injuries more time to file a UIM/UM claim.

PA Law – UIM & UM Claims After a Car Accident

Before we discuss the Erie ruling, let’s examine UIM/UM claims. Most people don’t understand how UIM (underinsured motorist)/UM (uninsured motorist) coverage works. It’s an optional coverage and often gets glossed over when it’s time to buy or renew an auto insurance policy.

UIM or UM claims become important after a car accident that’s caused by someone else. UIM coverage kicks in when you’re seriously hurt in a car accident caused by an individual who doesn’t have enough insurance coverage to compensate you for your injuries and damages. UM coverage kicks in when the at-fault driver doesn’t have any insurance or can’t be located, i.e., a hit and run situation.

These kinds of claims are made under the injured individual’s own car insurance policy, not the at-fault driver’s policy. In a sense, UIM claims are made second, after a claim is made against the at-fault driver. Therefore, the at-fault driver pays first, via their auto insurance policy. Then, the injured individual can seek UIM coverage if the financial compensation, if any, that’s received from the at-fault driver is insufficient. UM claims are made off the bat because the at-fault driver either doesn’t have any insurance coverage (i.e., lapsed policy) or can’t be found at all (i.e., hit and run).

What’s the Time Deadline to File a UIM/UM Claim in Pennsylvania?

In Pennsylvania, a 4 year statute of limitations period applies to UIM/UM claims. This 4 year period applies because UIM/UM claims are essentially contract claims. The car insurance policy is viewed as a contract. However, when does the 4 year clock start ticking?

Before the Erie ruling, it was well-established that these claims had to be filed within 4 years of becoming aware that you needed to make a UIM/UM claim. In the case of a UM claim, like a hit and run, the date of the accident would probably start the 4 year clock prior to the Erie ruling. That’s because the injured individual would have known that they were hit by a driver who took off and hence, there was no other insurance coverage available for the accident.

For example, a Pennsylvania resident is driving in Philadelphia and stopped at an intersection. As they proceed through the intersection, they are hit broadside by a car that fails to stop. This driver is never found. The 4 year period for the UM claim would probably start ticking on the date of the accident, or depending on the facts, when police officers indicated that they couldn’t locate the at-fault driver.

For UIM claims, the critical question (before the Erie ruling) was, when did the injured insured learn that their injuries exceeded the insurance coverage available to the at-fault party? So, the start of the 4 year clock depended on the facts of the given case.

For example, an individual injured in a car accident suffers serious injuries, including a broken leg. The at-fault driver has $100,000 of coverage which the injured individual learns about 6 months after the accident. One year after having surgery to fix the broken leg, the individual learns that the fracture has not healed and has become necrotic. He will need an invasive and costly surgery to repair the bone. Parts of the bone will be removed and an implant will be placed. The recovery is difficult and he loses his job as a result. Here, the 4 UIM clock would probably start ticking 1 year after the accident, the date when he learned that he’d need an invasive second surgery due to the necrotic bone.

Under the recent Erie ruling, the individual in our example would have more time. The 4 year clock wouldn’t start ticking when he learned about the need for the second surgery. Instead, the clock would start ticking when his insurance company declined to pay on the claim or otherwise failed to comply with the insurance agreement. Let’s say that after he learns he needs a second surgery, his attorney writes a UIM notice letter to his insurance company. Two months later, the insurance company sends a denial letter. Under the now controlling Erie ruling, the date of that letter would start the 4 year clock.

For more info about Pennsylvania accident law, visit the PA & NJ Auto Injury Law Library.

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