By Barbara Buratti, Esq.
Everybody knows that if you own a car in Oklahoma, you’re supposed to have car insurance. In fact, Oklahoma Compulsory Insurance Law requires liability coverage. Liability insurance kicks in when you are legally responsible for an accident that injures someone else, or damages someone else’s property. In that event, liability coverage will pay that other person for the damages you caused. Liability insurance coverage also provides a defense attorney if you are sued for damages resulting from such an accident.
Oklahoma Compulsory Insurance Law now requires car owners to carry liability insurance of at least $25,000 for bodily injury or death of one person in any one accident, $50,000 for bodily injury or death of two or more persons in any one accident, and $25,000 for property damage of others in any one accident. You can purchase much more than minimum limits. You can also purchase an umbrella policy that may provide coverage of $1 million or more above the primary liability coverage. In any event, you need to assess your own unique situation to determine the amount of coverage you want or need, keeping in mind that if you cause damages in an amount that exceeds your liability insurance limits, your personal assets may be vulnerable. Higher liability limits provide greater protection of your personal assets.
The driver of a vehicle involved in an accident involving property damage or bodily injury is required to show insurance verification. An owner or operator who fails to comply with the compulsory insurance law, or fails to produce a valid and current security verification, may be fined and have his license suspended. In addition, effective November 1, 2010, failure to demonstrate that there is liability insurance may result in the seizure of the vehicle if the law enforcement officer requesting verification has probable cause to believe the vehicle is not insured as Oklahoma Compulsory Insurance Law requires.
Unlike liability coverage, Oklahoma law does not require vehicle owners to buy uninsured/underinsured coverage, usually referred to as UM/UIM, but requires insurers to offer it. Not only must UM/UIM be offered, it is assumed that the person buying insurance wants to purchase UM/UIM coverage unless the person buying the insurance rejects the coverage in writing. The amount of UM/UIM coverage cannot exceed the amount of liability coverage provided under the policy. Thus, a policy with minimum liability limits will also include $25,000 of UM/UIM unless the insured signs a form stating that he wishes to reject UM/UIM coverage. By the same token, buying higher liability limits will result in the availability of higher UM/UIM coverage.
What is UM/UIM insurance? You buy liability coverage because it is required by law to protect others, and to protect your assets. You buy UM/UIM to protect yourself. UM/UIM insurance pays you for your medical bills, lost wages, pain and suffering if someone who is driving without insurance or doesn’t have enough of it hits you or your car and is legally responsible for damages. It is usually relatively cheap to add uninsured/underinsured motorist protection to your car insurance policy, especially considering the amount of protection it offers.
UM/UIM insurance provides payment to the “insured” who is injured by an uninsured or underinsured motorist or a hit-and-run driver. As the term suggests, a motorist without the insurance required by Oklahoma Compulsory Insurance Law is “uninsured.” A motorist is “underinsured” if he has insurance, but he does not have enough coverage to compensate the injured party for injuries and damages he causes. Generally, UM/UIM “insureds” include the insured named in the declarations, his or her spouse and members of their household, as well as passengers in an insured vehicle who are injured by an uninsured or underinsured motorist.
UM/UIM coverage is frequently described as being personal and portable. That means the insurance follows the person who is insured regardless of where he is when he is injured due to the negligence of an uninsured or underinsured motorist. Because the UM/UIM coverage follows the person and not the vehicle, unless a valid policy exclusion applies, it provides protection regardless of whether the insured is in a motor vehicle, on a bike, walking, or relaxing on the front porch when he is injured by an uninsured or underinsured motorist. So, if you’re riding your bike when an uninsured or underinsured motorist runs you off the road and you are injured as a result, your UM/UIM insurance covers you for your damages.
When a UM/UIM claim is submitted, Oklahoma law requires the insurer to investigate and evaluate the claim. The policy will outline the responsibilities of the insurer and the insured regarding the investigation and payment of UM/UIM claims. Generally, the adjuster handling the claim may ask for a statement and any supporting documents such as medical records, and/or ask the claimant to provide a signed authorization to enable him to obtain medical records directly from the providers. If financial losses are claimed, such as loss of past or future income, the adjuster may ask for documents that may pertain to these damages. If a proper investigation reveals that the available liability limits are high enough to cover the loss, the motorist is not “underinsured,” and there is no duty for the insurer to make payment. However, if a proper investigation reveals that the claimant is legally entitled to recover an amount greater than the available liability limits, Oklahoma law requires the UM/UIM insurer to make payment to the insured for the value of the claim up to UM/UIM policy limits. When an insurer pays a UM/UIM claim, it has the right of subrogation, which allows the insurer to seek reimbursement from the person responsible for the loss.
If you are trying to recover damages from the responsible party or his liability insurer and you may have a UM or UIM claim, it is necessary to make sure that you have the consent of your insurance company before attempting to settle with the other party’s insurance company. Why? Your insurer has certain rights in place, including the right of subrogation, and needs to be informed of any activity regarding the other insurer. If you settle with the other person or his insurance company without letting your own insurance company know about it, you may be jeopardizing your claim.
UM/UIM insurance and the law that pertains to it can be very confusing and complex. Therefore, if the occasion arises when you think you may have a UM/UIM claim, you may consider seeking legal advice.
Barbara Buratti is an attorney with Wilson, Cain & Acquaviva in Oklahoma City. Suggestions for future columns may be emailed to firstname.lastname@example.org.