Underinsured motorist coverage, called UIM coverage, covers an injured driver or passenger’s losses when the at-fault driver has some liability insurance, but his limits are too low to cover the actual medical bills, wage loss, pain and suffering his bad driving caused. If the at-fault driver’s insurance pays for damages up to its policy limits, then your underinsured motorist coverage will cover the excess amount up to the UIM limits you have. A little different from uninsured motorist coverage.
UIM law is very fluid over the last 50 years, but since November 1, 2011, UIM coverage is optional, not mandatory, in Wisconsin. Also, laws allow anti-stacking clauses and reducing clauses in underinsured motorist coverage in Wisconsin.
Anti-Stacking Clauses
Stacking UIM coverage allow a consumer to use all the insurance he or she has paid for. Say you have more than one car on your policy and you pay for UIM coverage on each car. If there is an accident and your damages are higher than the at-fault driver’s liability coverage, you will want to stack your UIM coverage limits to give yourself more insurance coverage. You stack or multiply the UIM coverage limits by the number of cars you pay insurance on. If you’re a driver with UIM limits of $50,000/$100,000 and you have 3 cars on your policy, stacking would increase your limits to $150,000 per person, $300,000 per accident.
Anti-stacking clauses in insurance policies prohibit stacking, even though you pay for the coverage separately and can only drive one car at a time! So in effect, you are pay for three coverage for a given policy period, but the insurance company knows you can only collect on one of the three at a time.
Reducing Clauses
Reducing clauses are similarly misleading. The 2011 Wisconsin laws allow insurance companies to reduce the UIM coverage limits by the amount of liability insurance the at-fault driver has. So if you have $100,000 of underinsured coverage and the at-fault driver has $100,000 liability coverage, you have zero UIM coverage, because your UIM is reduced by the liability payments. If the at-fault driver had $50,000 liability, they you would have $50,000 UIM to help cover you, even though you paid for $100,000 of coverage! Insurance companies can get away with this shenanigans 1) because they can, and 2) the pro-insurance company legislators pass laws to allow them to do it. Buy as much underinsured motorist coverage you can, knowing you will not get the full benefit of the bargain.
In Milwaukee, Wisconsin McCormick Law Office attorneys help auto accident victims by discerning the nature and extent of underinsured motorist coverage in a given situation.
