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Do Insurance Companies Go After Uninsured Drivers and How?

Injury Lawyer Team > Legal Advice  > Do Insurance Companies Go After Uninsured Drivers and How?

Do Insurance Companies Go After Uninsured Drivers and How?

Do Insurance Companies Go After Uninsured Drivers and How?

Driving without insurance is a widespread issue that affects many motorists. In 2022, approximately 14% of motorists, or about one in seven drivers, were uninsured in the United States, as reported by a 2023 study from the Insurance Research Council (IRC)

Understanding how insurance companies handle accidents involving uninsured drivers is crucial for both insured and uninsured drivers. This blog aims to explain how insurance companies go after uninsured drivers post-accident and what it means for them.

What is an Uninsured Driver? 

Uninsured drivers are drivers who operate a vehicle without a legitimate auto insurance policy. 

Most jurisdictions mandate that drivers carry a minimum amount of liability insurance to cover damages or injuries they may cause in an accident. These requirements vary by state, with some states enforcing stricter laws than others.

Uninsured drivers may be driving without insurance for various reasons, including financial constraints, lack of awareness, or intentional avoidance of insurance costs. If a driver is caught operating a vehicle without proof of insurance, they may face fines, license suspension, vehicle impoundment, and even jail time. 

According to a MarketWatch Guides study, the District of Columbia leads with 25.2% of drivers uninsured, followed by states like New Mexico, Mississippi, and Tennessee.

Contact us today for a free consultation with our expert personal injury lawyers. We’ll fight for your rights and help you get the compensation you deserve.

What is Uninsured Motorist Coverage and How Does it Work?

Uninsured motorist coverage (UM) is a type of coverage designed to protect insured drivers when they are involved in an accident with an uninsured driver. It covers medical expenses, lost wages, vehicle repairs, and other damages up to the auto insurance policy limits.

Though not mandatory in most states, it is available as optional coverage. Insurance companies typically have a limited window, often as short as 30 days, for filing underinsured motorist claims, so prompt action is crucial after an accident. Drivers in states like Missouri, Wisconsin, Illinois, and Oregon are required by law to carry uninsured motorist coverage.

For example, in Illinois, every auto insurance policy must include uninsured motorist coverage. The mandated coverage amounts are the same as the state’s minimum liability requirements: $25,000 for each injured person and $50,000 for multiple injured persons.

As soon as you notify your insurance company to file an uninsured motorist coverage claim, they will investigate to confirm the other driver was at fault and uninsured. Once the investigation is complete, they will offer a settlement based on your policy limits and the extent of your damages.

Uninsured motorist coverage ensures that you are not financially burdened by another driver’s lack of insurance or when involved in a hit-and-run accident. 

Uninsured Motorist Coverage Vs. Underinsured Motorist Coverage: What’s the Difference?

Underinsured motorist coverage (UIM) is crucial for protecting you when the at-fault driver’s insurance isn’t sufficient to cover your accident-related injuries. It pays the difference between the at-fault driver’s policy limit and your total losses. 

Sometimes, minimum liability insurance falls short in severe accidents or because of expensive medical bills in cities like Chicago. For instance, 

You are involved in a serious car accident with a driver carrying only the state minimum liability coverage. Your medical bills total $75,000. The at-fault driver’s insurance covers only $25,000, leaving a $50,000 shortfall. If you have uninsured motorist coverage up to $100,000, your policy would cover the remaining $50,000. This ensures you can handle manageable out-of-pocket expenses.

Essentially, uninsured motorist coverage protects you in accidents with uninsured drivers, while underinsured motorist coverage fills the gap when the at-fault driver’s insurance does not have enough coverage.

uninsured driver
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Steps to Take After an Accident Involving an Uninsured Driver

A report from the National Highway Traffic Safety Administration (NHTSA) shows that unlicensed drivers are responsible for 18.4% of fatal motor vehicle accidents.

Here are the important steps to take after getting injured in an accident involving uninsured motorists:

  1. Stay Safe: Ensure that you and your passengers are safe. Move to a secure location if possible and call emergency services if there are any injuries.
  2. Get Driver Details: Collect information about the other driver, including their name, address, and vehicle details such as make, model, and registration number.
  3. Contact the Police: Report the accident and inform the police that the other driver is uninsured. Obtain an official police report.
  4. Record the Scene: Documentation is important for evidence. Take photos or videos of the accident scene, vehicle damages, and any injuries you have suffered. Gather witness contact information if available.
  5. Notify Your Insurance Company: Contact your own insurance provider as soon as possible to file an uninsured motorist claim. Provide them with all the necessary documentation, including the police report and medical records.
  6. Seek Medical Attention: Visit a healthcare professional to check for injuries, even if they seem minor. 
  7. Consult a Personal Injury Lawyer: Consider seeking legal advice to understand your rights and any potential legal actions you can take.

What are Some Additional Coverage Options?

Insurance companies offer various types of coverage to protect against uninsured and underinsured drivers. 

MedPay (Medical Payments Coverage) covers your medical expenses from any accident, regardless of fault, and can be stacked on UM/UIM coverage if your medical bills exceed those policy limits.

Collision Coverage pays for car repairs if you can’t collect from another driver, typically after you pay a deductible.

Do Insurance Companies Go After Uninsured Drivers?

Yes, insurance companies do go after uninsured drivers to recover the costs of claims. They use legal processes like subrogation, especially if the uninsured driver has substantial assets.

Subrogation Process 

Subrogation is a legal process that allows insurance companies to recover costs from the at-fault uninsured driver. After paying the claim to their policyholder, the insurance company steps into the shoes of the insured to seek reimbursement from the uninsured driver.

Can Insurance Companies Pursue Uninsured Drivers? 

Insurance companies may decide to pursue uninsured drivers based on factors such as the severity of the accident or injury, the cost of property damages, and the likelihood of collecting the judgment. If the uninsured driver has substantial assets, the insurance company is more likely to take legal action.

Suing an Uninsured Driver 

The legal steps an insurance company might take include filing a lawsuit against the uninsured driver to recover the amount paid to their policyholder. Insurance companies can recover damages in two ways:

Lien on Property: If the defendant owns assets, the personal injury attorney can secure a lien on their property. The assets are frozen during the lawsuit, and you receive a portion of the proceeds when the property is eventually sold.

Payment Plan: If the defendant can’t pay the full judgment immediately, the court can arrange a payment plan, allowing smaller, periodic payments.

Impact on Policyholders

Premium Increases

If an insured driver is involved in an accident with an uninsured driver, their insurance premiums may increase, especially if they frequently file claims. However, if the insured driver has uninsured motorist coverage, the impact on their premiums might be less significant.

Coverage Limits

The financial outcome for the insured driver depends on the insurance coverage limits of their uninsured motorist policy. Higher insurance coverage limits provide better protection and reduce out-of-pocket expenses in the event of an accident with an uninsured driver.

Factors to Consider Before Suing an Uninsured Driver

Before deciding whether to pursue legal action against an uninsured driver, the following important considerations must be taken into account. 

Financial Capability: Check if the uninsured driver has the financial resources to cover any potential judgment. If they lack assets, recovering damages could be difficult.

Potential Recovery: Calculate the total amount you could recover, including medical expenses, property damage, lost wages, and emotional distress. Compare this with the expenses involved in legal proceedings.

Legal Expenses: Assess the costs associated with seeking compensation, hiring a personal injury lawyer and court fees against the potential recovery.

Time and Effort: Evaluate the time and effort needed to pursue legal action and determine if it’s justified by the potential outcome.

Alternatives: Explore other options to pursue compensation, such as uninsured motorist coverage, before initiating a personal injury lawsuit.

How a Personal Injury Lawyer Can Help You

Before deciding whether to pursue legal action against an uninsured driver, the following important considerations must be taken into account. 

Financial Capability: Check if the uninsured driver has the financial resources to cover any potential judgment. If they lack assets, recovering damages could be difficult.

Potential Recovery: Calculate the total amount you could recover, including medical expenses, property damage, lost wages, and emotional distress. Compare this with the expenses involved in legal proceedings.

Legal Expenses: Assess the costs associated with seeking compensation, hiring a personal injury lawyer and court fees against the potential recovery.

Time and Effort: Evaluate the time and effort needed to pursue legal action and determine if it’s justified by the potential outcome.

Alternatives: Explore other options to pursue compensation, such as uninsured motorist coverage, before initiating a personal injury lawsuit.

A personal injury lawyer provides vital legal expertise, guiding you through the complexities of filing a claim or lawsuit against an uninsured driver. 

  • They help gather evidence, file paperwork, and negotiate with insurance companies to ensure you receive fair compensation for your injuries and damages. 
  • By leveraging their knowledge of personal injury law, a personal injury attorney can assess third-party liability, potentially increasing your compensation through additional claims.
  • Personal injury attorneys review your auto insurance policy to identify relevant coverages such as Personal Injury Protection (PIP) and Uninsured Motorist (UM) coverage. 
  • They help you file claims accurately and within deadlines. 
  • Skilled in negotiations, personal injury lawyers manage all communications with insurers to secure a fair settlement. 
  • In cases where the uninsured driver cannot cover your damages, lawyers explore alternative compensation options, including suing additional responsible parties or utilizing other insurance policies.
  • Additionally, injury lawyers help with managing subrogation claims initiated by your own insurance company to recover costs from the uninsured driver. 

Example of an Auto Accident With an Uninsured Driver

Sarah, a law-abiding car driver, was struck from behind at a red light by an uninsured motorist, Mark. Unfortunately, Sarah suffered from whiplash and her vehicle sustained rear-end damage from the car accident, necessitating repair. She decided to pursue legal recourse, by hiring a car accident attorney to file a civil claim for bodily and property damages, to recover costs incurred due to Mark’s lack of insurance coverage.

Conclusion

Insurance companies can go after uninsured drivers through subrogation, but their success depends on factors like the driver’s financial situation and how bad the accident was. All drivers must have enough insurance to protect themselves and others. 

Understanding the risks of driving without insurance and how insurers try to recover costs can help you make smart decisions about your coverage. Check your policy to make sure you’re covered enough, including uninsured motorist coverage. Get insurance right away if you are driving without it to avoid serious problems.

If you are looking to recover compensation from an uninsured or underinsured driver, the Injury Lawyer Team is here to help you. Call (888) 424-5757 to schedule a free consultation and discuss your legal options. 

FAQs

What types of accidents does uninsured motorist coverage pay for?

Uninsured motorist coverage pays for accidents where the at-fault driver has no insurance, including hit-and-run incidents and accidents where you’re a passenger in an uninsured vehicle.

How does uninsured motorist coverage work in no-fault states?

In no-fault states, uninsured motorist coverage helps cover your medical expenses and damages even if the other driver is uninsured, regardless of who caused the accident.

How much can I get from an uninsured motorist claim? 

The amount you can get from uninsured motorist claims depends on the limits of your uninsured motorist coverage, which are often recommended to match your liability coverage limits. 

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