UM and UIM Insurance Protections

New Legislation Improves Uninsured Motorists (UM) and Underinsured (UIM) Insurance Protections For You

(October 2009)

Uninsured Motorists Coverage (UM) and Underinsured Motorists Coverage (UIM) are coverages that you can buy to protect yourself, your family members and occupants of vehicles you insure in the event of an accident that is caused by the negligence of the operator of a vehicle that does not have insurance or does not have enough insurance to cover your loss. These coverages are personal and portable. This means that these coverages follow your family members who are residents of your household when any of you are injured by uninsured and underinsured motorists regardless of whether you and your family members are occupying your insured motor vehicle at the time. As one judge put it, UM and UIM insurance cover you and your family members while occupying your insured motor vehicles, motor vehicles owned by others (i.e. your relatives) or while you and your family members are afoot (pedestrians), on horseback or on a pogo stick!

UM and UIM coverage is a very good benefit because it provides a source of recovery for you, even when the responsible party in an accident has no insurance or has very low limits. Now, thanks to true tort reform adopted by Governor Doyle and the Wisconsin Legislature, the value of UM and UIM coverage has been significantly improved. The new legislation, which takes effect for auto insurance policies first issued or renewed on or after November 1, 2009, provides as follows:

UM and UIM limits will have a mandatory minimum of $100,000 per person and $300,000 per occurrence.

Under previous law, UIM coverage was determined by a comparison of the UIM limits selected by you to the limits of liability of the at-fault driver (this means you would never know whether you had any of the UIM coverage you were paying for until it was too late). Under the new law, UIM coverage will be determined by comparing the at-fault driver’s limit of liability to the amount of damages sustained by you or a family member. UIM coverage will now be what we always thought it was – coverage which you purchase on top of the at-fault driver’s limits of liability.

Unlike the present state law, the limits selected by you for your UIM coverage cannot be reduced by the amount recovered from the at-fault driver.

If you purchase UM and/or UIM coverage under multiple policies for multiple vehicles, you will be able to add (“stack”) those UM/UIM limits for up to three policies/vehicles to cover the damages sustained by you or a family member.

Auto insurance companies who offer excess or umbrella liability coverage must offer UM and UIM coverage under their umbrella or excess liability policies.

What You Should Do

We recommend that you select UM and UIM coverages with the highest limits you can afford. Those limits should at least be equal to the limit you select for your potential liability to others in the event you are at fault for an accident. We also suggest that you purchase UM and UIM coverage under your umbrella if you have one.

As stated above, these changes will become effective for policies first issued or renewed on or after November 1, 2009. If your policy comes up for renewal in November of 2009, or if you purchase new coverage in November of 2009, then you will receive the benefit of these legislative changes. However, if you have existing policies and they do not come up for renewal until sometime after November of 2009, then we suggest you contact your agent to see what can be done to make sure these changes apply to you as soon as possible.

If you have already renewed your policy, or if it is up for renewal in September or October, you may have to terminate it effective November 1 and have new policies issued effective November 1, 2009. If you are thinking of changing companies, you should consider staying with the company you are presently with until November 1 and changing to the new company so that you receive policies that are first issued on or after November 1, 2009.

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Tel. 800-281-3643 or 715-344-0890

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New Legislation Improves Uninsured Motorists (UM) and Underinsured (UIM) Insurance Protections For You