Know the Law: Uninsured Motorist Coverage Offers Extra Protection From Driver Negligence

Scott H. Harris
Director, Litigation Department
Published: Union Leader
May 28, 2023

Q:  My sister was seriously hurt in an auto accident with a driver who crossed the double yellow line into her lane.  He has a $25,000 liability insurance policy, what are her options?

A:  This, or something close to it, is a question we hear multiple times throughout the year which is not surprising given the number of serious accidents on New Hampshire’s roadways.  Every year, for example, there are around 130 fatal motor vehicle crashes in the Granite State.  Using 2019 as an average year, there were an additional 493 accidents that resulted in incapacitating injury, with another 4,417 crashes that caused serious but not incapacitating injury.  Of course, the numbers of those killed or injured in motor vehicle crashes is even greater in more populous areas like Boston.

A $25,000 policy will barely make a dent in the losses suffered by those killed or seriously hurt. Bills for a hospital stay, surgery and physical rehabilitation can easily reach into the hundreds of thousands of dollars.  Even with health insurance, this care can require the payment of thousands of dollars out-of-pocket. There is also lost income that will need to be replaced for the period of time your sister cannot work.  Of course, those are just the financial costs of injury, not the larger cost of loss of enjoyment of life.

So, what does your sister do to make up and compensate for the harms suffered in the face of limited insurance.  There are two answers to the question.  First, if the party with limited insurance has assets, the injured party can sue, hopefully get a judgment and then recover that judgement from the offending driver’s assets that are available notwithstanding the amounts that can be exempted by debtors when insolvent (a complicated analysis).

Second, your sister should consult her own policy and any umbrella policies she may have to determine whether they provide a potential recourse.  In New Hampshire, every policy has underinsured motorist coverage equal to the policyholder’s own liability limits.  That coverage allows recovery for damages up to those limits.  If your sister has an automobile policy that covers her liability up to $100,000, then she has coverage of up to $100,000 that covers the harm another driver does to her.  In this instance, that means she can collect $25,000 from the offending driver and $75,000, from her underinsured coverage.

Of course, if her losses are $750,000, then $100,000 is inadequate. In that event, the hope is she has an umbrella policy.  Under New Hampshire law, the underinsured driver coverage increases to the limits of the umbrella policy.  Umbrella policies are commonly issued with limits of $1-2 million in coverage (although $5 million or more in coverage is not extraordinary).  The policy holder can waive the increase in the uninsured motorist coverage which you should never do.  Umbrella coverage costs about $600 a year for $1 million in coverage–an amount that can seem like a lot, but when you need it, you’ll be glad you had it.  If your sister has a $1 million umbrella policy, she can recover up to $975,000 for her injuries.

The lesson here is that you need to protect yourself from the financial consequences of other’s negligence including having sufficient uninsured motorist coverage.

Know the Law is a bi-weekly column sponsored by McLane Middleton. Questions and ideas for future columns should be emailed to Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.