Motor Vehicle Accidents
What Is Uninsured Motorist Coverage?
Most everybody knows about uninsured motorist coverage (UM) but few people know about the second part of the UM coverages. This portion of your coverage is known as underinsured motorist coverage (UIM.) These coverages are very helpful, particularly in a state like New Mexico where not every driver conforms with the law requiring minimum insurance coverage.
You may use your UM if the person that causes your collision and your injuries has no insurance. You can help claim damages up to the level of insurance coverage you purchased.
If the person who caused your collision and your injuries does not have enough insurance to fully compensate you for your damages, you may use your UIM. You may stack or add together your UM coverages from all of your vehicles that carry that type of insurance.
What Does This Look Like?
Let us give you an example: assume that you have 4 vehicles with minimum limits UM coverages of $25,000/$50,000 per vehicle. When added together, you have a total of $100,00 per person and $200,000 per accident. In your hypothetical condition, you have injuries totaling $100,000 but the wrongdoer (person responsible for the collision) only has the minimum liability coverage of $25,000/$50,000. Claims will be made for policy limits against the wrongdoer and given the extensive injuries you have suffered, the opposing insurance company will likely offer the $25,000 liability policy limits.
Then, with the authority of your insurance company, you can accept the wrongdoer’s policy limits of $25,000 and release him or her from liability. You can then proceed against your own UIM coverages purchased from your insurance company. The unfortunate reality in New Mexico is that the wrongdoer’s liability coverage cancels out the first $25,000 of your UIM coverages. That means, in our scenario, you only have claims against the remaining $75,000 of your own coverage.
New Mexico law states that you can only make claims against your total UIM coverages even if your damages exceed those coverages.
If you find yourself in this type of situation and you use your UM or UIM coverages according to New Mexico statutes, if the collision is not your fault, your insurance company cannot raise your rates or cancel you.