Uninsured Motorist Insurance

Uninsured Motorist Insurance

             It is important for everyone who owns a motor vehicle purchase high limits to protect against the possibility of being injured by someone who does not have insurance or who has a policy limit which is insufficient to adequately compensate the injured person.  As valuable as uninsured motorist coverage is, however, it is good to be aware that there are limits to the amount of protection it provides.

            In the case of Farthing v. Allstate Insurance Co. decided by Maine’s Supreme Judicial Court last December the court made it clear that uninsured motorist coverage will be applied only to provide recovery to the extent that recovery would have been available if the wrongdoer had insurance with a policy limit equal to the amount of UM coverage.  In that case the injured party was able to collect only $20,000, the guilty party’s policy limit, so Allstate, the injured party’s insurance company, paid only $80,000 even though the UM policy limit was $100,000.  The plaintiff argued that since her injuries were worth more than $120,000, Allstate should have paid her the entire $100,000.

            The court rejected the plaintiff’s argument and made it clear that “insurers may offset the amount of coverage available in UM policies to the insured by the amount actually paid by the tortfeasor,” and pointed out that the statute specifically mandates coverage that fills the gap left by an underinsured tortfeasor.