Hit by an Uninsured Driver? Where the Money Comes From

Uninsured motorist coverage exists because a meaningful share of drivers carry no insurance, and a liability claim against someone with no policy and no assets produces nothing. When you buy UM coverage, you are buying a promise from your insurer to pay you what the at-fault driver would have owed, within the limit you chose. In the claim, your insurer steps into the uninsured driver's shoes.

That is the part people find hard. Having paid premiums for years, they expect their own company to be on their side. In a UM claim, it is the other side. The adjuster will ask whether the other driver was really at fault, whether your injuries came from this crash, and whether your medical treatment was necessary, exactly as an opposing liability adjuster would. Insurers owe their own policyholders a duty of good faith that they do not owe strangers, which gives you some leverage, but the valuation fight is the same.

Because this is a contract claim, the policy sets the rules. Most policies require you to notify the insurer promptly, cooperate, and submit disputes to arbitration rather than a jury. Read the UM section of your policy early, because deadlines inside it can be shorter than the state's statute of limitations.

Uninsured motorist coverage applies when the at-fault driver has no liability insurance at all, when their insurer denies coverage, for example because the policy had lapsed, and usually when the driver cannot be identified after a hit-and-run. The claim is straightforward in concept: your insurer pays what the missing policy would have paid.

Underinsured motorist coverage applies when the at-fault driver has insurance but the limit is below your damages. Many drivers carry the state minimum, which in a number of states is $25,000 per person or less. A serious injury can exceed that in the first week of hospital care. UIM coverage pays the shortfall, but how the shortfall is calculated depends on your state and your policy.

Under an offset rule, your UIM limit is reduced by what the at-fault driver's insurer paid. If you carry $100,000 in UIM and the other driver's insurer pays $25,000, you can collect at most $75,000 more. Under an add-on rule, your full UIM limit sits on top of the other driver's payment, so the same facts allow up to $125,000 in total. The difference is large, and it is set by state law and policy language, not by the adjuster.

Suppose a driver with no insurance runs a red light and hits your car. You suffer a broken leg requiring surgery, with $60,000 in medical bills and $10,000 in lost wages, and a fair value for pain and suffering of perhaps $50,000 more, making the claim worth about $120,000 in total. Your policy carries UM bodily injury coverage of $100,000 per person.

Your claim goes to your own insurer. After reviewing the police report and your records, the adjuster accepts that the other driver was at fault and values the claim at $90,000, arguing that some of the physical therapy was unnecessary. You disagree. The dispute goes to the arbitration process your policy requires, and an arbitrator awards $115,000. Because your limit is $100,000, you collect $100,000, and the rest is uncollectible unless the uninsured driver has assets.

Now change one fact: the other driver had a $25,000 minimum policy. Their insurer pays its full $25,000 limit. In an offset state, your $100,000 UIM pays at most $75,000 more, for $100,000 total. In an add-on state, your UIM could pay up to $100,000 on top, which more than covers the $115,000 award. All figures are illustrative, and the policy limits on both sides are usually the ceiling of any uninsured driver claim.

The steps are the same as any crash with a few additions, because the claim is going to run on your own policy's terms.

• Call the police and insist on a report, even for a minor crash; many UM claims, and nearly all hit-and-run claims, require one.
• Photograph the other driver's license plate, license, and anything they show you as proof of insurance, and note if they admit they have none.
• Report the crash to your own insurer immediately and state that you are making an uninsured motorist claim, not just a collision claim.
• Ask your insurer in writing whether it has verified the other driver's lack of coverage, and how; drivers who claim to be uninsured sometimes are not.
• Get medical care promptly and keep every record; your own insurer will scrutinize treatment gaps exactly as a liability insurer would.
• Before accepting any payment from the at-fault driver's insurer in an underinsured case, ask your own insurer for written consent, because many policies void UIM coverage if you settle with the other driver without it.

Whether you have UM coverage at all depends on the state. Around twenty states require insurers to include it in every auto policy, sometimes with the option to reject it in writing. In the rest, it is optional and must be selected. If your declarations page does not list UM or UIM bodily injury, you may have no coverage for an uninsured driver beyond your own health insurance and medical payments coverage.

Stacking rules differ. In states such as Florida and Pennsylvania, stacking can be purchased or is the default, allowing you to multiply the per-person limit by the number of vehicles on the policy. Other states prohibit stacking by statute. Hit-and-run rules differ too: some states require physical contact with the unidentified vehicle before UM coverage applies, which excludes crashes where you swerved to avoid a car that never touched you.

No-fault states add a layer. In Florida, Michigan, New York and New Jersey, your personal injury protection pays initial medical bills regardless of who hit you, and the UM claim is for the losses above that, subject to the state's injury threshold. The statute of limitations for a UM claim is often the contract limitations period rather than the injury period, and it can be longer or shorter; Tennessee and Kentucky's one-year injury deadlines, for example, do not necessarily govern a claim on your own policy, but the policy may set its own.

You can sue a driver who has no insurance, and if you win you will have a judgment. Collecting it is the problem. People who drive without insurance usually do so because they cannot afford it, and a judgment against someone with no assets and low income can sit unpaid for years. Some states allow wage garnishment and some suspend the driver's license until a crash judgment is paid, which creates pressure, but the money is often small and slow.

A direct lawsuit makes sense in a few situations: when the driver has real assets or a business, when the driver was working and an employer may be responsible, or when a third party such as a bar that overserved a drunk driver, a vehicle owner who lent the car, or a government body responsible for the road can be brought in. An attorney checks these before recommending suit.

Your UM insurer, after paying you, may pursue the uninsured driver itself to recover what it paid. That is its right of subrogation and does not affect what you receive.

Uninsured and underinsured claims are contract claims with their own deadlines, consent requirements and arbitration rules, and a mistake such as settling with the at-fault insurer without consent can void the coverage entirely. Most personal injury attorneys work on contingency, and an attorney handling the liability claim will usually handle the UM or UIM claim as part of the same matter.

Ask Legal Matters is a free claim-review request service, not a law firm. Requests may be shared with independent attorneys and legal services partners who handle inquiries in your state, and an attorney must evaluate the facts and the policy before anyone can tell you what is available. If you were hit by a driver with no insurance or not enough, you can request a free claim review.

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Need local rules? Choose your state from the injury law guides hub or read the statute of limitations by state.