The good news after your car accident is that the other driver is insured. Whew!?
Not so fast. While car insurance is required in Wisconsin, the state has some pretty low minimum requirements for automobile insurance:
$10,000 for property damage,
$25,000 for injury or death of one person, and
$50,000 for injury or death of two or more people.
“That’s not very much at all and damages can add up quickly,” said attorney Brian Weber. “Medical expenses alone can be quite high. If you miss six months of work and then can only go back half time or to light duty, the damages can go up very quickly.”
If the other driver only has minimum insurance, you could find yourself owing thousands or even tens of thousands of dollars to the hospital without the income to pay it.
That’s the reason for having underinsured insurance as part of your auto insurance policy. Underinsurance is as important as uninsured coverage, and it can be purchased at different levels as well.
“Underinsurance provides the difference between total damages and the other party’s coverage,” said Weber, whose practice includes insurance law.
If the other driver has a $50,000 limit for coverage in an accident but the actual cost comes to $100,000, your underinsurance coverage picks up the rest. It also provides the legal resources to pursue payment from the other driver.
It should be noted that even if you have underinsurance for up to $250,000, you would not get that amount. Underinsurance only covers actual damages.
What recourse do you have if the other party does not have enough car insurance and you don’t have underinsurance coverage? You could sue the other party. If you win, you could have a judgment ordering the other party to pay the remaining damages, but Weber warns that’s very different from collecting what’s owed.
“Someone who has minimal coverage is not likely to be able to pay the judgment,” Weber said. “This person is not likely to have the money to reimburse you for the damages.”