Underinsured Motorist Coverage in Texas
Written by Greg on March 31, 2020
What if you are in an accident with a driver without insurance? Or your automobile accident and have suffered very severe injuries, and the driver of the vehicle responsible for the accident has only minimum insurance policy?
In Texas, you must be offered uninsured and underinsured motorist coverage insurance by your insurance company. Purchasing such coverage is recommended in Texas. The reason we recommend you buy underinsured and UIM coverage is because the odds of getting into an accident with either an uninsured motorist or in a more severe crash with someone who only maintains a minimum policy are significant.
Texas Uninsured / Underinsured Insurance Claims.
If you are involved in an accident with someone not covered by car insurance, you might discover it at the scene of the crash. Sometimes, the driver will tell the police they don’t have coverage and be ticketed for no insurance. Other times the at-fault driver will produce an insurance certificate, but you later discover that the coverage had lapsed.
Uninsured Motorist (UM)coverage provides insurance benefits if you are in an accident with someone at fault but did not have insurance coverage. Contact between the vehicles is required. Even in a hit and run accident, your uninsured motorist coverage will apply if the other driver was at fault and hit a car where an occupant was covered by UM.
Underinsured Motorist (UIM) coverage applied when the driver of the at-fault vehicle did not have sufficient liability coverage for you all of your damages. UIM stacks on top of the at-fault driver’s liability coverage up to your losses but never above the UIM policy limits.
Passengers can use UIM coverage on their own vehicle and also UIM coverage for the driver of the car they are a passenger in unless all vehicles are under the same policy.
Many situations exist where there can be more than one underinsured/uninsured motorist claims.
What is the stacking of UIM coverage?
Stacking is a situation where someone is covered by more than one insurance policy and seeks to add the policies together to recover the maximum sum.
In State Farm Mut. Ins. Co. v. Conn, 842 S.W.2d 350 (Tex. App. 1992), the court held that passengers could not stack UIM benefits of the vehicle in which they were a passenger and also claim liability coverage from that driver. The innocent passengers could not make both underinsured claims and liability claims under the same policy.
However, the stacking of underinsured coverage is permitted when there are multiple layers of UIM coverage.
Can the insurance company offset for PIP?
Under the standard Texas personal auto policy, an insurer may receive a credit for the PIP benefits paid under the UM coverage. However, recent case law has clarified the limits to credit by the insurance company for the PIP they have paid. PIP offset cannot be taken if your actual damages are greater than the combined PIP and UM policy limits. If your damages exceed the uninsured motorist coverage plus PIP coverage, the insurer may not offset.
The dilemma for the insured is that many Texas insurance companies will dispute the damages and claimed offset unless your medical expenses exceed all insurance. In most personal injury cases, pain and suffering, disability, and disfigurement are almost always more significant than the medical bills themselves, which were incurred to treat the injuries.
How to Get Uninsured or Underinsured Benefits in Texas?
What are the two elements needed for an underinsured or uninsured motorist claim?
- The insured must prove fault by the on or underinsured driver.
- The insured must also prove legal damages before they are entitled to UM or UIM motorist benefits.
Case law under Brainard v. Trinity Universal Insurance Co., 216 S.W.3d 809 (Tex. 2006), places the burden on the personal injury victim to prove in court their damages before the UM or UIM carrier has to pay. This new case law requirement has allowed insurance companies to play hardball with their own insured, by forcing their insured to file expensive lawsuits to get the benefits of coverage they paid for.
Before Brainard, holding insurance companies accountable for bad faith efforts with their own insured were much more straightforward. However, like a toddler who can never be punished, in Texas, allowing the insurance companies to abuse their policyholders without legal consequences has led to an increase in lawsuits that should not have been necessary.
Talk with an Attorney
Unfortunately, given the difficulties in making a claim with their own insurance company for benefits they paid for, hiring a car accident lawyer is almost always required.
If you have questions about an auto policy, a Texas car accident, or personal injury claim, call us for a no-obligation consultation at 281-587-1111.