Uninsured Motorist coverage is the term used when there is no coverage at all on the other vehicle.
Underinsured Motorist coverage is the term used when the other vehicle's policy limit is inadequate to pay for all your damages.
Provided you have a NJ Car insurance - Standard Policy, your own insurance company may pay for damages to your vehicle caused by;
The minimum limit for Uninsured/Underinsured Motorist Property Damage coverage is $5000 but you can buy higher limits. However, in no event can your Uninsured/Underinsured Motorist Coverage limits be higher than your own Liability Coverage limits.
You are only eligible to receive reimbursement of underinsured motorist benefits if your Underinsured Motorist Coverage limits are higher than the Liability Coverage limits of the other driver.
All Uninsured and Underinsured Motorist Property Damage claims require you to pay a $500 policy deductible.
When filing an Uninsured/Underinsured Motorist claim it is important to remember that your company "stands in the shoes" of the Uninsured/Underinsured driver and will only pay your claim if the other driver was legally responsible for your damages, or in other words, at-fault for the accident.
Under New Jerseys Comparative Negligence law, you can only collect damages if your degree of liability does not exceed that of other driver(s) in the accident.
As comparative negligence allows for more than one person to be at fault for an accident, your company can reduce the settlement of your Uninsured/Underinsured Motorist claim by any percentage of fault that may be attributable to you.
Example:
No. You must first submit the claim to the other driver's insurance company who will pay you for your damages up to the liability limit of their insured's policy, once they have determined that their insured is at fault. If there are damages which still remain unpaid, you can then submit these to your company for reimbursement under Underinsured Motorist Coverage.
Example:
YES. Your insurance company has certain rights and most will require you to notify them and obtain their permission before settling with the other carrier.
WHEN DO I NOTIFY MY INSURANCE COMPANY THAT I AM FILING AN UNINSURED/UNDERINSURED MOTORIST CLAIM, AND WHAT DO I HAVE TO PROVIDE THEM?
While some insurance companies will only open a claim for Uninsured/Underinsured Motorist coverage once you receive written notification from the other insurance company that there is no coverage, or not enough coverage, to pay for your loss, it is in your best interest to contact your company immediately when there is any indication that the other driver may not have had adequate insurance to cover your loss. Your insurance company will be able to advise you on what specific information or documentation you need to supply them in order to substantiate your Uninsured/Underinsured Motorist claim.
CAN I FILE AN UNINSURED MOTORIST CLAIM IF THE INSURANCE COMPANY WHO INSURED THE VEHICLE WHICH CAUSED THE ACCIDENT DENIES MY CLAIM BECAUSE THE VEHICLE HAD BEEN STOLEN AT THE TIME OF THE ACCIDENT?
Yes. If the individual who was driving the vehicle at the time of the accident did not have permission from the owner to use the vehicle, the insurance company does not have to provide insurance coverage for such a loss. Under these circumstances the vehicle is considered to be uninsured for this accident.
MY CAR WAS STRUCK BY A VEHICLE THAT WAS CUT-OFF BY A PHANTOM (UNKNOWN) VEHICLE WHICH FLED THE SCENE OF THE ACCIDENT. CAN I FILE AN UNINSURED MOTORIST CLAIM?
No. In order to file an Uninsured Motorist claim for property damage you must identify the vehicle and be able to demonstrate that the vehicle was either not insured under a policy of insurance or that there was no coverage provided under a policy of insurance at the time of the loss. Under these circumstances you may want to consider filing a first party claim if you have collision coverage or pursuing a third party claim against the driver of the vehicle which actually struck you to try to recover at least some of your damages based on that driver's degree of negligence.
MY CAR AND THREE OTHER PARKED VEHICLES WERE STRUCK BY A VEHICLE WHICH WAS ONLY INSURED FOR PROPERTY DAMAGE LIABILITY UP TO $10,000. IF $10,000 IS NOT GOING TO BE ENOUGH MONEY TO PAY FOR THE DAMAGES OF ALL FOUR VEHICLES, WHO GETS PAID?
In situations where the total amount of property damage from multiple claimants is going to exceed the liability limits of the responsible party, that party's insurance company will offer a pro-rated settlement amount to each of the claimants for their damages. If this amount does not pay for your damages in full, you can then submit the remaining damages to your own company for reimbursement under Underinsured Motorist if you have high enough limits.
THE OTHER DRIVER WAS CLEARLY AT-FAULT FOR THE ACCIDENT BUT THEIR INSURANCE COMPANY IS REFUSING TO PAY MY CLAIM BECAUSE THEY SAY THEIR POLICYHOLDER WON'T COOPERATE WITH THEM. WHAT CAN I DO?
If the insurance company does not intend to provide coverage for a loss based on their policyholders unwillingness to cooperate, which is a violation of the conditions of the policy, the vehicle and driver are considered to be uninsured for this accident. Under these circumstances you would be able to file an Uninsured Motorist claim with your own company once the other driver?s insurance company denies (disclaims) coverage in writing.
MY CAR WAS STRUCK WHILE PARKED BY ANOTHER VEHICLE WHICH RAN OFF THE ROAD FOR NO APPARENT REASON. WHEN I TRIED TO COLLECT FROM THEIR INSURANCE COMPANY I WAS TOLD MY CLAIM WAS GOING TO BE DENIED BECAUSE THEIR POLICYHOLDER HAD SUFFERED A HEART ATTACK WHICH CAUSED THE ACCIDENT AND HE WAS, THEREFORE, NOT AT FAULT. CAN I COLLECT UNDER MY UNINSURED MOTORIST COVERAGE?
No. There is a difference between a denial of payment because of lack of coverage and a denial based upon lack of liability. While the individual is considered to be fully insured for the accident, his insurance company is denying your claim based on their belief that their policyholder was not liable, or at-fault, for the accident.
Under these circumstances you would either have to file a first party claim if you have collision coverage, or pursue a third party claim against the other driver and attempt to prove that he was, in fact, legally responsible for his actions.
WHAT CAN I DO IF MY INSURANCE COMPANY AND I can't AGREE ON THE AMOUNT OF MY DAMAGES OR IF THEY DENY MY UNINSURED/UNDERINSURED MOTORIST CLAIM?
If you and your insurance company can't reach an agreement as to whether you are legally entitled to recover damages, or the amount of your damages, the terms of the policy require that such disputes be resolved through Arbitration. Either you or your insurance company can make a written demand for Arbitration as explained in your policy. Here is how the process usually works;
MUST I CONCLUDE MY CLAIM WITHIN A CERTAIN TIME FRAME?
Yes. You must either accept a final settlement or file a lawsuit in the appropriate court of law within the time period specified by the statute of limitations.
If you fail to accept a final settlement offer or file suit before the statutory period runs out, you may jeopardize your right to receive any settlement at all.
OTHER THAN FILING A LAWSUIT, WHAT ELSE CAN I DO IF MY INSURANCE COMPANY REFUSES MY DEMAND FOR ARBITRATION, OR IF THEY CONTINUALLY DELAY ARBITRATION?