Uninsured and Underinsured Motorist Claims Flashcards

An adjuster receives a UM bodily injury claim involving a hit-and-run where no physical contact occurred. In many states, what additional requirement must the insured meet to qualify for UM benefits?

Answer: There must be corroborating evidence or an independent witness to the accident

Many states require independent corroboration of the hit-and-run incident (such as a witness, police report evidence, or physical evidence) to prevent fraudulent phantom vehicle claims.

When the insured's own insurer disputes liability in a UM/UIM claim, many states allow the parties to resolve the dispute through:

Answer: Arbitration, as required by the insurance policy or state statute

UM/UIM policies commonly contain arbitration clauses, and many states mandate arbitration as the dispute resolution mechanism for coverage and liability disagreements between the insured and their own carrier.

What is the primary purpose of the 'consent to settle' clause in a UIM policy?

Answer: To protect the UIM insurer's potential subrogation rights against the at-fault party

The consent-to-settle clause requires the UIM insurer's approval before settling with the tortfeasor so the insurer can preserve its right to pursue subrogation against the at-fault party after paying UIM benefits.

In a 'non-offset' or 'add-on' UIM state, how are UIM benefits calculated when the at-fault driver's limits are $25,000 and the insured's UIM limit is $100,000?

Answer: The insured can receive up to $100,000 from UIM regardless of the liability payment received

In an add-on (non-offset) state, UIM limits are not reduced by the liability payment received, so the insured could collect up to $100,000 in UIM benefits in addition to the $25,000 from the at-fault driver (subject to total damages).

Which coverage applies when the insured is struck by a driver who has liability insurance, but those limits are less than the insured's damages?

Answer: Underinsured Motorist (UIM) coverage

Underinsured motorist (UIM) coverage applies when the at-fault driver carries liability insurance but those limits are insufficient to fully compensate the injured insured for their losses.

When processing a UM/UIM claim, the adjuster must evaluate the at-fault driver's liability. Which standard does the adjuster typically apply?

Answer: The same negligence standard that would apply if the insured were suing the at-fault driver directly

UM/UIM claims are evaluated using the same negligence and liability standards that would govern a lawsuit against the at-fault driver, since the insured essentially steps into the shoes of the tort claimant.

A passenger injured in a vehicle operated by an uninsured driver may seek UM benefits under which policy?

Answer: The passenger's own auto policy, if it extends UM coverage to the insured while occupying non-owned vehicles

Many UM policies extend coverage to the named insured and family members while occupying non-owned vehicles, allowing the injured passenger to seek UM benefits under their own auto policy.