In Property & Casualty Insurance Procurement & Litigation (Ten Recurring Themes Every Lawyer Should Know) insurance expert witness David L. Stegall, CPCU, ARM, ARe, RPA, of Risk Consulting & Expert Services writes on ten recurring themes that often lead to litigation. Attorneys either dealing in insurance procurement litigation issues or with clients who purchase insurance may want to consider these ten themes:
Theme 7 of 10 Understand Uninsured/Underinsured Motorist (UM) coverage before it is needed. This coverage acts as the liability coverage for persons who injure you, your family, your employees or anyone driving your car with your permission when the person who causes injury either does not have liability insurance or is underinsured. Various states handle the issue of UM coverage differently, and apart from the 12 states that provide so-called ‘no-fault” coverage with Personal Injury Protection (PIP), insurance buyers seldom purchase adequate Automobile UM Liability Limits.
With this in mind, the minimum limit an automobile policy provides is typically woefully inadequate. It is estimated that 15 percent of all drivers on the road are without insurance and even more have minimum limits. In some states, this average percentage can be doubled.
There are very legitimate reasons that commercial entities do not increase their Uninsured/Underinsured limits. Many provide other insurance that would cover employees, such as workers’ compensation insurance and certain employee benefit coverages that would act as primary coverage before Uninsured/Underinsured coverage would come into play.
Lesson #7: Although this increased coverage will also increase the automobile liability premiums, the increase in coverage and premium should, at least, be considered.
Reoccurring Conclusion: Just like poor legal advice, poor understanding of insurance procurement issues can be very expensive for your client!
David Stegall is the Principal Consultant at Risk Consulting & Expert. Mr. Stegall holds a B.A. in Communication from Auburn University and is a Chartered Property and Casualty Underwriter, an Associate in Risk Management and an Associate in Reinsurance, all awarded by The Institutes in Malvern. PA. He is also a Director of the Society of Risk Management Consultant