The Price of Underinsured Drivers: What you Need to Know

Motor vehicle accidents are a daily occurrence. Sometimes accidents are minor, resulting in damaged property and temporary bruising. Other times, they are much more serious. The National Highway Traffic Safety Administration reported  334 fatal car crashes in Massachusetts in 2009 and approximately 300 in 2010.  

When someone is seriously injured or killed in a car accident, the financial and personal cost to the victim and their family is tremendous. Under these circumstances, an investigation is done to determine whether or not the accident was caused by someone else’s negligent driving; if so, a claim is made against that person’s automobile insurance carrier.

In theory, those who are injured and the families of those killed by someone else’s negligent driving can recover the fair value of their damages from that person’s motor vehicle insurance carrier. But what happens if the negligent driver is underinsured?

Massachusetts auto insurance requirements mandate a mandatory minimum amount of motor vehicle liability insurance that all vehicles must carry. Currently, the mandatory coverage for bodily injury to others is $20,000 per individual and $40,000 per accident. This means that the insurer will pay a maximum of $20,000 to any one injured person and $40,000 total for all claims combined, no matter how many different people are injured.

The mandatory minimum insurance amount is rarely adequate to compensate
someone who has been seriously injured or the family of someone killed in a car accident. So what can you do to better protect yourself against uninsured or underinsured drivers? 

Purchase Underinsurance Coverage

Underinsurance protection covers you, your household members and anyone else in your car, when they are injured in an accident and the responsible driver does not have enough insurance to compensate those injured. It is optional coverage on the standard Massachusetts Automobile Insurance Policy, and is generally available to all who wish to purchase it.

Although you will be charged an extra premium (and you cannot purchase more
in underinsurance coverage than you purchase bodily injury coverage), it can be
a very powerful safety net if you become a victim of an uninsured or
underinsured driver. Given the low amount of required coverage in Massachusetts, this is one way to affirmatively protect yourself and your family.

Determine Whether Additional Auto Insurance Coverage Applies

If the negligent driver is operating a car that is not his own, an investigation should be done to determine if other insurance coverage exists to provide additional benefits. In some circumstances there may be multiple policies that provide coverage for a car accident victim. For instance, if the negligent driver was in the course of his employment at the time, there may be additional business insurance policies or employer’s liability policies that apply.

Similarly, certain excess insurance policies and homeowner’s insurance policies provide additional coverage for automobile accidents. Keep in mind that the additional insurer will likely dispute that their coverage applies, so consult your attorney to fully understand your options.

Identify Additional Responsible Parties

If your attorney has fully investigated the existence of insurance benefits and there is still insufficient coverage to compensate the injured party, what other options are available? It is important to examine the actions and behavior of the negligent driver, to see if there are additional individuals that contributed to causing the accident or the driver’s behavior. For example, if an individual was at a bar or restaurant prior to the accident and was over served, there may be additional recourse through the establishment’s insurance company.

In late May, 2010 Massachusetts began requiring bars and restaurant to carry a minimum of $250,000 per person/$500,000 per accident liquor liability insurance coverage. Proof of coverage is now required for renewal of the establishment’s liquor license. This law has greatly improved the ability of victims to recover when they are harmed by an intoxicated patron.

Should that same intoxicated individual be at a private party rather than a bar, it may be appropriate to file a social host liability claim.  Generally you must establish that a social host knew or should have known that his guest was drunk, but nevertheless gave him or permitted him to take an alcoholic drink. The difficulty often lies in proving that the host actually supplied the alcohol (if a guest brings their own alcohol to your home, for example, the host is likely not responsible). While it is expected that those working in a bar or restaurant be on the lookout for drunk patrons, social hosts are not held to the same expectation. Both Dram Shop and Social Host Liability claims are easier to establish if the driver is under the legal drinking age, but in all instances they can be challenging
cases to prove.

The process of receiving compensation for motor vehicle accident victims can be a highly complex task of unraveling multiple parties, claims, and insurance coverage. Understanding what you can do to protect yourself before an accident happens can give you greater control and financial security should you need it.