The seemingly obvious answer to the question posed in the title would be "Uninsured motorist coverage pays when the person who caused a car accident and injuries or death can't." The reason an at-fault — and, therefore, liable — driver might not be able to pay for property damage or costs related to recovering from physical, emotional and financial losses following a crash include not having automobile insurance, having too little coverage (i.e., being underinsured), and losing a lawsuit in which a large monetary award is made through mediation, settlement or civil court verdict.
In Virginia (VA), every driver who purchases insurance is required to carry uninsured motorist (UM or UIM) coverage. People are also allowed to drive without carrying any insurance at all if the pay an annual $500 fee to the state. UIM fees collected through the Department of Motor Vehicles go into a fund that helps insurance companies pay uninsured motorist claims to policy holders.
UM/UIM coverage is supposed to provide a safety net when underinsured or uninsured drivers harm others. Sometimes, at-fault drivers with too little or no insurance simply cannot afford to pay premiums. Many times, however, the people are negligent and irresponsible. Their inability to purchase affordable insurance results from a history of convictions for driving under the influence of alcohol or drugs or acting recklessly behind the wheel.
In a perfect justice system — and certainly what Virginia lawmakers intended when setting up the uninsured motorist system — UM or UIM payments would be automatic to traffic accident victims who could not collect damages and court awards from the people who harmed them. The payment does come through the victim's own policy, but for legal intents and purposes, it is made on behalf of the underinsured or uninsured driver.
Two related cases currently working their way through state and federal courts in Richmond prove that Virginians operate in a legal system that often delivers far less than perfect justice. The fundamental problem is that car insurance companies often sue in civil courts over when and if they must make UM or UIM payments to personal injury victims.
Both suits stem from a left-turn wreck in which the woman behind the wheel of the struck car suffered a head injury. The at-fault driver admitted that she caused the accident but contested the victim's injury claim. A circuit court entered a $4 million award for the plaintiff, and the defendant later filed bankruptcy. The defendant had carried only $300,000 in injury coverage and could not pay the rest of the judgment.
Unable to collect from the underinsured at-fault driver or the woman's insurance company, the injured plaintiff sought compensation through the UIM provision of her own insurance policy. Her insurer argued it was not required to pay the UIM claim, and the Supreme Court of Virginia is scheduled to hear the insurance company's argument in April 2012.
A federal suit brought by the injured woman against her insurer for breach of contract has been suspended pending the ruling of the state's high court.
My own opinion, as a personal injury attorney who has helped hundreds of crash victims deal with insurance companies since the mid-1980s, is that the whole situation is a mess. I know all too well that insurers will try just about any tactic to avoid paying legitimate claims, and flat out refusing to honor a policy's UIM provision is a tactic insurance companies resort to far too often.
While I can't predict how the state and federal judges will rule on the cases in Richmond, I'm rooting for the injured woman. At the same time, I know that the series of suits stemming from the original accident illustrate the need for all plaintiffs to hire a lawyer who is willing and able to fight for them for years when necessary.
About the Editors: The Shapiro, Lewis & Appleton personal injury law firm, which has offices in Virginia (VA) and North Carolina (NC), edits the injury law blogs Virginia Beach Injuryboard, Norfolk Injuryboard and Northeast North Carolina Injuryboard as pro bono services.