We’ve written elsewhere on our site about the fact that New Mexico insurance law is generally pretty favorable for injured New Mexicans. This is especially true when it comes to uninsured and underinsured motorist coverage (sometimes referred to as UM/UIM). Unfortunately, many New Mexicans don’t really understand what this coverage is, or why it’s so important to carry it. Even many insurance agents don’t understand this coverage, and tell their customers not to bother getting it! This is a HUGE MISTAKE, and really bad information.
UNINSURED/UNDERINSURED MOTORIST COVERAGE: WHAT IS IT?
Ordinarily, if you are involved in a car or motorcycle crash and it’s not your fault, the other person’s auto insurance will step in to pay for the damage to your vehicle and for your injuries, including your medical bills and other damages. This is called “liability insurance.” But what happens if the driver who hits you didn’t have any insurance?
This is where uninsured/underinsured motorist coverage comes into play. UM/UIM coverage says that if the driver who hit you (sometimes called the “liable party”) didn’t have auto insurance, your own auto policy will step in to pay all of the damages caused by that driver–including the damage to your vehicle, as well as your medical bills, pain and suffering, lost wages, and lost enjoyment of life.
Uninsured/underinsured motorist coverage also comes into play when the driver who hit you had insurance, but did not have enough insurance to fully compensate you for your losses. The state minimum bodily injury liability policy in our state is $25,000/$50,000. This is the least amount of auto insurance that we all, by law, must carry, and, frankly, that amount of coverage doesn’t go very far when you’re talking about bad wrecks and big injuries. The easiest way to explain what this means is with an illustration: Let’s imagine that Driver A, who carries a minimal insurance policy, t-bones a vehicle containing Driver B and Passengers C, D, and E. Driver B is badly injured, incurring medical bills of more than $100,000.00, while passengers C, D, and E all suffer lesser injuries. In most scenarios, Driver B would be entitled to the first $25,000.00 of Driver A’s insurance coverage, with Passengers C, D, and E splitting the second $25,000.00. This is all that can be recovered from Driver A, unless Driver A has significant personal assets (a very, very unlikely scenario). But let’s say Driver B has uninsured/underinsured motorist coverage of $100,000.00. In that case, Driver B’s UNDERINSURED motorist coverage will kick in to help compensate Driver B for his damages, above and beyond what Driver B has recovered from Driver A’s minimal insurance policy.
WHY IS IT IMPORTANT?
Unfortunately, New Mexico has one of the highest rates of uninsured motorists in the country. Simply put, if you are involved in a crash that’s not your fault, there’s a good chance that the driver who hit you may not have any insurance to cover your damages. And if you don’t carry uninsured motorist coverage, you are out of luck. You could, of course, sue the uninsured driver for your damages, but the likelihood of recovering your full damages from a person who couldn’t be bothered to keep their insurance coverage active is, in our experience, highly unlikely. So if you are hit by an uninsured driver and you don’t have UM/UIM coverage on your own auto policy, you could be left with an unrepaired car, unpaid medical bills, and unreimbursed lost wages. We’ve even, unfortunately, seen cases where New Mexicans were tragically killed by uninsured drivers, and without UM/UIM, the loved ones they left behind were left with no financial recourse.
It is also important to carry UM/UIM because uninsured motorist coverage will cover punitive damages, in the event that you are injured by a drunk, texting, or other reckless driver. We have a very high rate of drunk driving crashes in the state of New Mexico, with New Mexico leading the nation in drunk driving deaths. The criminal justice system tries to punish drunk drivers by imposing fines and jail time, but the civil justice system also provides a remedy to punish these bad drivers in the form of money, called “punitive damages.” Some liability insurance policies try to exclude coverage for punitive damages. But your own UM/UIM coverage will pay for all damages to which you are legally entitled if you’ve been hurt by an uninsured or underinsured motorist–including punitive damages. This means, simply put, that if you are hurt by a drunk or texter, and you have UM/UIM coverage, you may be able to get more money for your claim.
HOW MUCH CAN I GET?
You can carry UM/UIM coverage in any underwritten amount up to the total liability coverage you carry. So, for example, if you have $100,000/$300,000 in bodily injury liability coverage, you are entitled to purchase UP TO $100,000/$300,000 in UM/UIM coverage. You could also choose to purchase less than your liability limits (unless you have a minimal insurance policy), but we do not recommend doing this. Our advice is to purchase as much UM/UIM coverage as you can afford on every vehicle you insure!
Also note: if you insure more than one vehicle on your insurance policy, your UM/UIM coverages may “stack” to give you an even bigger pot of coverage to tap into. For example, let’s say you insure four vehicles on your auto policy: your commuter vehicle, your spouse’s commuter vehicle, a vehicle for your teenage son, and a big family vehicle for road trips. Let’s also say that you carry $50,000/$100,000 in UM/UIM coverage on each insured vehicle. In the event that you get in a wreck with an uninsured or underinsured driver and you are badly injured, your four separate vehicle UM/UIM coverages may “stack” on top of each other, giving you a total coverage of $200,000/$400,000 that you may potentially be able to tap into to compensate you for your damages.
HOW DO I GET IT?
Talk to your insurance agent or, if you do business with your insurance company online, request a quote to revise your coverages.
I WAS HURT BY AN UNINSURED OR UNDERINSURED MOTORIST AND MY INSURANCE COMPANY SAYS I DID NOT HAVE UM/UIM COVERAGE. WHAT CAN I DO?
There is still hope! In the state of New Mexico, there are very specific requirements insurance companies must comply with in order to ensure that you understand what UM/UIM coverage is, and what you are giving up if you choose not to purchase it on your auto policy. Our experienced attorneys have had great success arguing to the court that various insurance companies failed to comply with those requirements. If the court finds that the insurance company did not comply, your policy might be “reformed” to include UM/UIM coverage–even if you never paid premiums for it. We’re not miracle workers, and we can’t always get the insurance companies to provide this coverage, but we understand the complex requirements put in place by our courts and legislature, and we know exactly the arguments to make in a situation like this. If you’ve been hurt by an uninsured motorist and your insurance company says you didn’t have coverage, give us a call. We’re happy to analyze your insurance documents to see if we can make an argument for reformation.
Uninsured/Underinsured motorist coverage is hugely important in the state of New Mexico. Every year hundreds of New Mexicans are injured, and even killed, by drivers without valid liability insurance. If these victims don’t have UM/UIM coverage, they could be completely without recourse. We recommend carrying UM/UIM coverage in the greatest available amount you can afford. We have seen too many people left out to dry after being grievously injured by uninsured drivers in New Mexico. Check your coverages today, and talk to your insurance agent about adding this important coverage if you don’t have it!