Driving Without a Seatbelt
Protect your customers and
yourself by offering uninsured/underinsured motorist coverage.
As many as 13% of all U.S.
drivers are uninsured, according to the Insurance Research Council. That
percentage varies state by state, with the highest percentage of uninsured
drivers found in Florida where 26% of driver are uninsured.
Often, it is the worst drivers who are uninsured because their driving
record pushes their premiums to levels they cannot afford. Uninsured
drivers put the livelihood and financial stability of law-abiding citizens
at risk. The solution is uninsured motorist coverage.
All states but New Hampshire have a minimum required amount of coverage a
driver must carry to legally operate an automobile. However, these minimum
limits have not kept pace with the rising cost of inflation.
Florida, for instance, only requires $10,000 of coverage for property
damage and $10,000 of coverage for personal injury. Meanwhile, California
requires $15,000 in coverage for personal injury and only $5,000 for
property damage. These state-mandated limits are not nearly enough to cover
a serious auto accident.
Roughly, 40% of states allow drivers to stack uninsured/underinsured
motorist coverages. In those states, a policyholder can multiply their
UM/UIM coverage by the number of autos they insure, which is an important
feature of the auto policy in states that allow stacking. However, except
in Rhode Island, insurance carriers are allowed to prohibit stacking
policies and agents need to make sure they are offering a stackable policy
if the state allows.
Another twist is uninsured motorist property Damage (UMPD), which is
available in 15 states. An additional eight states require it. Traditional
UM/UIM coverage includes medical bills, pain and suffering, and lost income
damages to a driver and their family members in their auto or another auto,
as well as passengers in the covered auto. UM/UIM coverage does not cover
damage to your auto. UMPD coverage will pay for uninsured or underinsured
property damage resulting from an accident.
While many see UMPD as a duplication of collision coverage, it is much
cheaper than collision coverage and usually carries a lower deductible.
UMPD is an excellent alternative for older or lower value autos, especially
if the customer wants to drop their collision coverage.
Agents should always offer limits that match the liability limits of the
customer. In fact, some states require a customer to sign a rejection form
if they choose less coverage than the liability limits they carry.
Moreover, don't forget the umbrella coverage. Make sure to offer matching
UM/UIM limits on any umbrella policies you place.
UM/UIM limits will never be an errors and omissions issue until you have a
customer who is badly injured in an auto accident. That is why it's best to
make sure you document that you offered the coverage and note any higher
limits that are rejected by the customer to protect your agency from an
James Redeker is vice president
and claims manager at Swiss Re Corporate Solutions and works out of the
office in Kansas City, Missouri. Insurance products are underwritten by
Westport Insurance Corporation, Kansas City, Missouri, a member of Swiss Re
This article is intended to be used for general informational
purposes only and is not to be relied upon or used for any particular
purpose. Swiss Re shall not be held responsible in any way for, and
specifically disclaims any liability arising out of or in any way connected
to, reliance on or use of any of the information contained or referenced in
this article. The information contained or referenced in this article is
not intended to constitute and should not be considered legal, accounting
or professional advice, nor shall it serve as a substitute for the
recipient obtaining such advice. The views expressed in this article do not
necessarily represent the views of the Swiss Re Group ("Swiss
Re") and/or its subsidiaries and/or management and/or shareholders.
Copyright © 2018, Big "I" Advantage, Inc. and Westport Insurance
Corporation. All rights reserved. No part of this material may be used or
reproduced in any manner without the prior written permission from Big
"I" Advantage. For permission or further information, contact
Agency E&O Risk Manager, 127 South Peyton Street, Alexandria, VA 22314
or email at email@example.com.
Almost 15% of the total claim
count comes from Personal Auto coverage claims.
Source: Advance Claims - Swiss Re Corporate Solutions Claims
Free Risk Management Webinar: Join
our Free January Agency Risk Management Webinar:"Let's Talk
Everyone knows the story of
Goldilocks, and her struggle to find the porridge, the chair, and the bed
that was "just right." When it comes to limits of liability, it's
often said that the highest limit is best but in practice, agents must help
their clients settle on the amount that is "just right" for the
situation at hand.
How can you ensure your approach to
limits is correct? Do you feel confident that proper policy limits are in
place for your clients? Do you worry about whether your own agency is appropriately
protected? When your customers are under-insured, it creates claims against
your agency. When your agency is under-insured, it limits the defense your
carrier can provide.
Don't let the fear of a large claim
keep you up at night. Take action by joining Big "I" Professional
Liability and Swiss Re Corporate Solutions for an Agency Risk Management
Topic: Let's Talk Limits: How Much Is Enough for You AND Your
Date: Wednesday, Jan. 22nd, 2020 at
2 p.m. ET.
For more risk management
information and resources, including past webinar recordings from this
series, visit the www.independentagent.com/EOHappens.
During the hour-long webinar, Swiss
Re Corporate Solutions panelists Matt Davis, claims manager and Mark
Shackelford, senior underwriter, will discuss how to approach choosing liability
limits for both your clients and your own agency. The webinar will feature
scenarios for you take into consideration and provide lessons learned from
a claims and underwriting perspective.
This webinar series is offered by
Big "I" Professional Liability at no cost as an exclusive Big
"I" member benefit. Big "I" members in good standing
may register unlimited attendees from the member agency to attend. No CE is
received for this session.
If you have any
questions please contact Pam Andrews.
Big "I" Professional Liability offers these free
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benefit. A collection of risk management resources, including articles,
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