29 Dec, 2022

What Is the Difference Between Uninsured and Underinsured in Bloomington?

Author Todd A. Strong

The main difference between underinsured and uninsured motorist claims is that underinsured claims are cases where the at-fault motorist has coverage, but it is insufficient to cover your medical costs, while uninsured claims are where the at-fault driver has no insurance at all. Another main difference is that in underinsured claims, the at-fault driver’s identity is always known. Uninsured claims arise when the at-fault driver’s identity is not known. These are hit-and-run instances, where he or she has fled the scene. This is often the case where pedestrians or cyclists are involved.

cash and insurance policy
cash and insurance policy

Illinois law prescribes mandatory insurance requirements for motorists. This mandatory insurance covers third-party claims, where a person who was injured in an accident can claim from the insurance of the person who caused an accident. Unfortunately, roughly 13 percent of Illinois drivers do not carry this mandatory insurance. Even if they do, it may not be enough to cover to cost of your injuries or damages. Uninsured and underinsured coverage will cover your costs in these cases.

What Is Auto Insurance?

Auto insurance is a form of protection from financial loss. It is an arrangement in which you pay an insurance company a monthly fee, and in return, the insurance company pays you in the event of some form of specified loss, damage, or injury.

Auto insurance pays you if you are involved in an accident. For example, if you buy a car, and sometime later cause an accident. The damages to your car are $8,000 and for the other car are $8,000. You would have to pay your damages and the other driver’s damages since you would be liable because you caused the accident. Without insurance, you would have to pay $16,000. An unexpected expense this large would be extremely difficult to recover from.

If you purchased an auto insurance policy, your premiums could be a cost of, for example, $50 per month. There will be a specified amount of coverage in your policy. It could be $20,000 in this example. So, if you have this coverage, and have paid your premiums every month, your insurance will pay out the full $16,000 to repair both vehicles, since this is lower than the full coverage amount in your policy. You will be responsible for the cost of repairs to the other vehicle as well as your own, but this cost is then covered by your insurance company. You will not have to cover the costs out of pocket.

Insurance claims can be first-party claims or third-party claims. A first-party claim is a claim you make with your insurance company. If you are in an accident and have insurance coverage, and you claim for the cost of repairs with your own insurance, then this is a first-party claim. If you are in an accident caused by another liable driver, you can claim the cost of repairs from the at-fault driver’s insurance. This is a third-party claim, as you are claiming from someone else’s insurance, not your own.

Illinois law requires drivers to carry a minimum liability insurance of $25,000 for one person, and $50,000 for two or more people injured or killed per car accident. Additionally, $20,000 for property damage per accident. Illinois car owners are required to provide car insurance verification at least twice a year. A driver can be ticketed and fined for not having this mandatory coverage.

What Is Uninsured Motorist Coverage?

Uninsured motorist coverage protects you in the event of an accident with another driver who is at fault and does not have his or her insurance coverage. Its purpose is to place you in the same position that you would have been in, had the uninsured driver had liability insurance. Uninsured motorist coverage is a first-party claim, meaning that the cover is provided by your own insurance company, and you claim with them. It covers you for bodily injury.

Illinois requires uninsured motorist coverage, and this mandatory cover has minimum limits the same as those required for liability insurance. So, motorists are required to carry uninsured motorist coverage for a minimum of $20,000 for one person injured per accident, and $50,000 for two or more people injured per accident. While you do not have to have a higher cover or cover for property damage, you may be able to get such cover with your insurance company, on the terms that they offer it, likely at a higher monthly premium.

Uninsured coverage will be activated when:

  1. The other driver is at fault
  2. The owner of the other vehicle or other driver has no insurance at all, or the identity of the owner of the vehicle, or at-fault driver is unknown. This is known as a hit-and-run.

Hit and Run

For an accident to qualify as a hit-and-run, there must be physical contact between the injured person, or policyholder, and the hit-and-run vehicle. This can be either direct or indirect. There has been a court case in which the hit-and-run car struck a car, which then struck the policyholder’s car. The policyholder person was then able to make an uninsured insurance claim on the basis that the first car was a hit-and-run vehicle.

Points arising from other court cases are that where the policyholder person strikes an unidentified object in the road, this is not a hit and run since the object causing the damage was not a vehicle. Also, where the policyholder swerves to avoid another vehicle, which then causes him or her to hit an object or the median, this does not qualify as a hit-and-run, because there is no contact between the hit-and-run vehicle and the policyholder.

What Is Underinsured Motorist Coverage?

Underinsured motorist coverage protects motorists if they are injured by another driver who is at fault, and the other driver’s insurance coverage is not sufficient to cover treatment for the injuries. It provides the insurance company of the policyholder will cover the difference between the limits of the at-fault driver’s insurance and the medical bills, up to the maximum cover of the policyholder’s insurance policy.  Underinsured motorist coverage is mandatory in Illinois on the same terms as uninsured motorist coverage. This means that it is mandatory for motorists to have a minimum coverage of $25,000 for injury to one person, and $50,000 for injury to two or more people per accident.

For example, you may be in an accident and suffer bodily injuries. Your medical bills come to a total of $40,000. The at-fault driver has insurance coverage of $25,000 and you have a policy for underinsured motorist coverage of $40,000. In this case, the at-fault driver’s insurance will pay out the maximum under his or her policy of $25,000 to you to cover your medical bills. There is a shortfall between your medical bills and what the insurance paid out of $15,000 so your insurance will give you an additional payment of this shortfall of $15,000 under your underinsured motorist coverage.

To be able to claim using underinsured motorist coverage, two things are required:

  1. The owner or driver of the other vehicle must be at fault.
  2. The owner or driver of the other vehicle must have insurance liability limits that are lower than the injured person’s underinsured motorist limits.

To claim underinsured coverage in Bloomington, the injured person or policyholder’s injuries must be caused by the underinsured car. An underinsured claim is not valid where the at-fault person’s liability limits are the same as the policyholder’s liability limits.

How Uninsured and Underinsured Motorist Coverage Works in Bloomington

To qualify as an insured person to claim for either uninsured or underinsured coverage in Bloomington, a person must fall into one of the following categories:

  1. The policyholder.
  2. Spouse or family members of the policyholder. To qualify for coverage as a family member, a person has to live in the insured person’s home with some degree of permanence. This means that a person must be living with the policyholder.
  3. Persons injured while in a covered vehicle. This applies to people who are driving the policyholder’s car with his or her permission.
  4. Persons injured while occupying a car that is being driven by the policyholder.

Coverage will cover costs associated with bodily injury. These can include medical bills, lost wages if you are unable to work while recovering, compensation for pain and suffering, and possibly funeral expenses. If you have coverage for property damage, then it can cover the repair costs for your vehicle.

This type of insurance does not cover damage to items inside your car, legal fees affiliated with the accident, or expenses above your policy limit.

To begin a claim, the policyholder must notify his or her insurance in writing of the accident, and intention to claim. The notice must include the policyholder’s name, names, and addresses of each person involved, the time and place of the accident, and details including names and addresses of witnesses.

Once the insurance company receives notice, it will investigate the claim, and then accept, negotiate some form of settlement, or reject the claim. In investigating the claim, the insurance company may request certain things from the policyholder. The policyholder, upon request by the insurance company, is required to provide details of all medical treatments, as well as submit to an independent medical examination. Hit-and-run accidents are required to be reported to the police within 24 hours. The policyholder may be requested to provide photographs of the insured vehicle. He or she may also be requested to work with the insurance company by securing and giving evidence, answering questions relating to the accident, cooperating in settlement negotiations, and attending trials or hearings.

You may have a question about when to get a lawyer after an auto accident. You can get one at any stage in the process, but the sooner you get one, the better he or she will be able to help you through the process.

The Difference Between Underinsured and Uninsured Motorist Claims

The main difference between underinsured and uninsured motorist claims is that underinsured claims are cases where the at-fault motorist has coverage, but it is insufficient to cover your medical costs, while uninsured claims are where the at-fault driver has no insurance at all. Another main difference is that in underinsured claims, the at-fault driver’s identity is always known. Uninsured claims arise when the at-fault driver’s identity is not known. These are hit-and-run instances, where he or she has fled the scene. This is often the case where pedestrians or cyclists are involved.

If you have been involved in an accident with an uninsured or underinsured driver, it is unfair for you to have to pay because an at-fault driver is not following the law by not having insurance to cover our damages. Hiring a Bloomington car accident lawyer will help you to know how to file an uninsured motorist claim, navigate the legal process, and make sure that you receive fair compensation.

About The Author

Photo of Todd A. Strong
Illinois workers’ compensation and personal injury lawyer Todd A. Strong is the founder of Strong Law Offices in Peoria, Illinois. Todd brings considerable legal knowledge, experience, and skill to the table to ensure injured victims throughout the state are treated with respect, dignity, and fairness.