By Rakin Hamad
Sometimes the answer is obvious: the injuries or circumstances surrounding the accident are different. But what about two similar cases. Similar injuries. Similar scenarios. How can the amount ultimately recovered still be dramatically different?
Very often, the answer comes down to one thing: Auto Insurance coverage. Not only the insurance carried by the person who caused the crash, but also the insurance that the injured party carried to protect themself. And when it comes to how much of the payout ultimately remains after medical expenses are addressed, health insurance can also make a significant difference.
The At-Fault Driver’s Insurance May Set the First Limit
As of January 1, 2025, Virginia requires automobile liability policies to provide at least:
- $50,000 for bodily injury or death to one person
- $100,000 for bodily injury or death to two or more people in one accident
- $25,000 for property damage
This is commonly written as 50/100/25.
That may sound like a substantial amount until someone suffers a serious injury. A surgery, hospitalization, months of rehabilitation, lost wages, or permanent impairment can easily result in damages far beyond $50,000. We have unfortunately seen cases where our clients have medical expenses in the millions. Even in cases without catastrophic injuries, most clients are surprised at the cost of an emergency room visit. In short, medical expenses tend to pile up quickly and make the minimum auto coverage of $50,000 insufficient.
If the person who caused the crash carries only $50,000 in bodily injury liability coverage, that amount becomes the practical ceiling on what can be recovered from the at-fault driver. In even worse situations, sometimes the at-fault driver does not even have the minimum auto insurance required by law.
Despite Virginia’s insurance requirements, we see cases with uninsured drivers or hit-and-run cases regularly. In hit-and-run cases, the at-fault driver is treated as an uninsured driver unless the identity of the hit-and-run driver is discovered later. That is why relying on the at-fault driver’s insurance is always a gamble. Not only is it a gamble, but it is a very bad gamble.
So to answer our original question, the difference may simply be that one at-fault driver carried better insurance than the other. We have no control over whether the person approaching us in the next lane carries $50,000, $500,000, or no applicable insurance at all. We do, however, have some control over what is considered next.
The Injured Party’s Own Coverage May Change the Outcome
This is where uninsured motorist (UM) and underinsured motorist (UIM) coverage become so important. UM/ UIM coverage protects the injured party when the person who causes the crash does not have enough insurance, does not have any automobile insurance, or when the at-fault driver cannot be identified.
Again, going back to the original question, sometimes the difference between a modest recovery and a substantial recovery is coverage the injured party put in place years before the accident ever happened.
Virginia law requires automobile policies to include UM coverage and provides for UIM coverage; generally, those limits correspond with your liability limits unless the coverage is reduced through the elections permitted by Virginia law. Meaning insurance will give policyholders the option to lower or remove their UIM/ UM limits. Typically framed as a “cost savings”, many people opt for this. That is a mistake.
That leads to the question we wish more people would ask when buying insurance: Why would you insure other people better than you insure yourself? Liability insurance protects you financially when you hurt someone else. UM/UIM coverage protects you and your family when someone else hurts you and does not carry enough insurance.
***PRO TIP: UIM/ UM covers you for any incident involving a motor vehicle. You, the injured party, do not have to be in the motor vehicle. This is extremely important in situations where the injured party is hit as a pedestrian, cyclist, or on a scooter. This is major coverage if you are an avid cyclist or walker, or if you have a child that likes to play in the neighborhood streets.
What Can You Do to Protect Yourself?
This is where the story shifts from what happened to someone else to what can be done now. Pull out your automobile insurance declarations page and look at two numbers: Liability coverage and UM/UIM coverage.
We generally encourage people to carry more than Virginia’s minimum liability limits and to always keep their UM/UIM limits equal to their liability limits. We recommend asking your insurance agent for the maximum amount of insurance they will write. This normally ranges from a $250,000 – $500,000 policy. Most clients are surprised at how little that increase of coverage will actually cost them per month. We also recommend looking into an umbrella policy with UM coverage added. You can learn more about umbrella policies here.
Finally, maintain health insurance whenever possible. It serves a very different purpose from auto insurance, but after a serious accident it can play an enormous role in preventing medical bills from consuming a recovery.
Insurance is easy to ignore when nothing is wrong. Unfortunately, once an accident happens, the policies already in place can determine much of what happens next. The time to discover a gap in coverage is while it can still be fixed, not after the accident.
Curcio Law offers free “Understanding Your Insurance Before You Need It” seminars locally or via Zoom. We invite participants to bring their declaration page for a free review. Contact us to request a free insurance seminar for your group.
