Underinsured and Uninsured Claims in Texas

Shockingly, one-in-seven drivers in Texas don’t have insurance. If one hits you and you don’t have uninsured and underinsured coverage, you’re out of luck. Both policy features are well worth having, but you may need legal help to make the most of them.

Uninsured vs Underinsured

Although uninsured coverage and underinsured coverage are often packaged together, they are strictly two separate types of cover.

Uninsured coverage applies to cases where you suffer loss caused by another driver, but you can’t benefit from their insurance. This includes three main situations:

• The driver flees the scene and can’t be identified. This could be a parking lot prang or a collision on the road.
• You have the driver’s details, but they don’t have insurance.
• The driver has an insurance policy but has invalidated it, for example by missing premium payments, intentionally hitting your car, or letting an excluded driver operate their car.

The uninsured coverage extends to three types of loss:

• Damage to your car.
• Damage to property (belongings) of you and other people in the car.
• Bodily injury.

Meanwhile underinsured coverage is for cases where the other driver has a valid policy, but it doesn’t have a high enough limit to cover the losses. When this happens, the other driver’s policy pays out in full and then the underinsured coverage on your policy pays out to make up the shortfall.

Check Your Coverage

There’s a good chance that you already have uninsured coverage and don’t know about it. Texas law says you have to actively opt out of getting it (as happens with Personal Injury Protection cover). Your insurer must include uninsured coverage unless they have a signed opt-out from you, so you could have the cover even if you haven’t specifically paid for it. It’s well worth checking to see whether you have uninsured coverage and, if so, what terms and conditions apply.

Uninsured Coverage Loopholes

Here are some of the key things to watch out for with uninsured coverage in Texas:

• The policy only covers cases with physical contact between vehicles. That means it won’t apply if, for example, another driver’s error means you have to swerve and hit a tree or barrier.
• You must file a police report before you can claim
• The insurance company can sometimes offset money it pays out on a PIP claim, deducting this from the payout under the uninsured coverage component. This only happens on bodily injury cases and is only allowed if the total claim amount doesn’t exceed the cover limit on the uninsured coverage component.
• It’s possible you might be covered by underinsured coverage from two different policies, for example if you’re a passenger in somebody else’s car. If this happens, the two policies will split the payout in proportion to their respective cover limits. The higher cover limit will determine how much you can be paid.
• Underinsured coverage doesn’t apply if you’re hit by a government vehicle that has immunity from insurance claims.
• Your policy will offer a specific limit for payouts from the underinsured components. This can’t be more than the limit for your policy’s liability component.
• The law sets out a standard $250 deductible for property damage claims through uninsured cover. There’s no deductible for bodily injury claims.
• Your insurer can’t simply assume the other driver has valid insurance. They’ll need to prove this is the case before denying your claim for the uninsured component.

Underinsured Coverage Loopholes

The main thing to watch out for with underinsured coverage claims is that you need permission from your insurer before reaching a settlement with the other driver’s insurer. Your insurer will want to check you’ve got the maximum available payout from the other driver’s insurer, thus reducing the amount your own insurer has to pay.

Underinsured coverage is affected by a legal ruling known as the Brainard precedent. In simple terms, this means it isn’t enough to prove that the other driver was at fault. Instead, your insurer can insist you get a court judgment that proves the other driver caused legal damages. The risk is that your insurer drags its feet or throws out obstacles in the hope that you conclude the time and money spent getting this judgment outweighs the payout you’ll get from the underinsurance claim.

The Bottom Line:

Uninsurance and underinsurance coverage is a valuable element of auto insurance, but you need to understand your rights and responsibilities. That’s particularly the case if you didn’t intentionally sign up for this component and instead have it as the legal default.

Unlike some elements of insurance, uninsurance and underinsurance coverage isn’t a benefit you can passively rely on. Instead, you may need expert advice to reap its full rewards. Contact Bennett Injury Law today if you have any queries or need help on a potential claim.

Charles Bennett

Charles Bennett is a Plaintiff’s trial attorney and trial consultant based in Dallas, Texas. His law firm, Bennett Injury Law, is a personal injury plaintiff’s law firm that specializes in 18-Wheeler and Commercial crashes, Wrongful Death, Traumatic Brain Damage, Motor Vehicle Crashes, and Workplace Injuries. Cases Charles has consulted on in 2019 have won over $35M in verdicts.