GOOD INFO: UNINSURED/UNDERINSURED MOTORIST Question> I had read in a lawyer article that uninsured/underinsured bodily injury insurance followed the policy holder, not the vehicle. I believe you agreed with that statement. I made mention that it costs less to have that policy on a 4-wheel vehicle vs. a motorcycle. I switched my policy a couple years ago and saved a couple hundred $$/year. I insure 4 vehicles (two 4-wheel plus two motorcycles), and had un/under insurance on only one. Just wanted you to know that my insurer, AMERICAN FAMILY INSURANCE, called me and said I was his only client that didn’t have un/under insured policy on all my 4-wheel vehicles. AMFAM is requiring their customers to purchase un/under insurance on all 4-wheel vehicles. He said I will find all insurers are doing this. However, AMFAM is not requiring that insurance on motorcycles … yet. Have you found this to be true? Is it true that those policies still follow the policy holder? If so, they’re making me stack policies, but probably won’t pay out from both, should a claim occur. ANSWER> This may surprise you, it means a lot to me that you actually reached out to me to ask this question. Too often I feel as though people think they know what is best for them but they feel like they do not want to bother a lawyer with a question. Unfortunately, too often by the time they get around to asking the question it is simply too late. First, and most importantly, your understanding is correct, your uninsured and under-insured motorist coverage follow you. I am sure that is why American Family now wants you to purchase this coverage on all of your vehicles. This way they increase how much money they make significantly while, in reality, providing you no additional coverage. Of course, one could argue this is not exactly true. While it does not provide you any additional coverage it would provide coverage for anyone else that is any of those vehicles so in some ways coverage is increased by having it on all your vehicles. But for the protection of you, personally, once you have this coverage on any vehicle it follows you anywhere you go. To be honest I have no idea whether or not other insurers are requiring this. I am only involved after the fact in these matters so I do not know how other insurers are handling this. I will say – obviously – that your agent has reason to suggest that all insurers are doing this. I think it is absolutely worth your time to check out some other insurance companies and see if they are willing to provide a high level uninsured/under-insured motorist coverage on only one vehicle. Keep in mind that the slight risk that does come with this is that if you have low coverage on a different vehicle and you have other people in your car – that are not insured under your policy – they will only be protected by the lower amount of uninsured/under-insured on the other vehicles. We have also seen a disturbing trend among some insurers in Arizona. In some of these cases they are reducing the amount of liability coverage that they provide where a family member is operating the vehicle and another family member is a passenger who is injured. In other words, traditionally if you had $100,000.00 of coverage and you are driving with a family member/insured next to you and that family member was injured – and the injury was your fault – they would have $100,000.00 of coverage. Some insurers – and I cannot recall off-hand if American Family is one of them – has started putting in their policies a reduction of those limits to $15,000.00 where the family member is negligent. Therefore, if you are going to look for a new insurance company I would check to see if they lower the limits in any way if a family member that is driving is at fault and I would also check to see if you can purchase insurance in a high amount on only one of your vehicles if thats what you choose to do. Mark P. Breyer, Esq. Breyer Law Offices, P.C. 15715 South 46th Street, Suite 100 Phoenix, AZ 85048 (480) 505-2160 direct line (480) 496-7311 fax breyerlaw mark@breyerlaw
Posted on: Wed, 13 Nov 2013 18:21:38 +0000