What You Should Know About Texas Uninsured/Underinsured Motorist Bodily Injury Claims
Navigating the complexities of uninsured/underinsured motorist (UM/UIM) bodily injury claims in Texas can be daunting. If you were injured in a car accident caused by an uninsured or underinsured driver, understanding your rights and options is crucial for securing the full compensation you deserve.
What Does Uninsured/Underinsured Motorist Bodily Injury Insurance Cover in Texas and Who is Covered?
Uninsured Motorist bodily injury insurance in Texas is designed to protect you if you are injured in an accident caused by a driver who does not have insurance. This includes situations where the other driver flees the crash scene without providing their insurance information and cannot be found after the fact.
Underinsured motorist bodily injury insurance in Texas is designed to protect you if you are injured in an accident caused by a driver who does not have enough insurance to fully cover your medical expenses and/or other bodily injury damages you suffered resulting from the crash.
Generally in Texas auto insurance policies, Uninsured Motorist coverage and Underinsured Motorist Coverage are bundled together, and the combination is commonly abbreviated as UM/UIM coverage. Uninsured and Underinsured motorist bodily injury insurance typically provide coverage for the most common bodily injury damages resulting from a crash, including past medical bills, future medical expenses, lost wages/earning capacity, and pain and suffering/mental anguish.
Coverage on an Uninsured/Underinsured Motorist bodily injury insurance policy typically extends to the policyholder, any family members residing in the same household, and passengers in the insured vehicle at the time of the accident. The specifics of who is covered under a given policy can be determined by reviewing the declarations page of the insurance policy and the policy itself. If you do not have a copy of these documents, they can be requested from your insurance company, which is obligated to provide you with a copy under Texas law. Understanding who is covered under your policy can help ensure that all eligible parties receive the compensation they deserve if they were injured in a car accident where the other driver causing the accident was uninsured or underinsured.
Under Texas law, Uninsured/Underinsured Motorist coverage must be provided as part of an auto insurance policy unless it is specifically rejected in writing.
Company Vehicles and Borrowed Vehicles May Provide Uninsured Motorist Coverage Under the Insurance Policy of the Company or the Vehicle Owner
When driving a company vehicle or a borrowed vehicle, you may be covered under the uninsured/underinsured motorist policy of the vehicle owner or the company the vehicle belongs to. If you are injured in a crash while driving a work vehicle or a borrowed vehicle, it is important to confirm what types of insurance coverage were in effect for the vehicle at the time of the crash to get the full compensation you deserve for your injuries and damages caused by the crash.
It is important to verify the specifics of the insurance policy covering the vehicle you were driving at the time of the crash by obtaining a copy of the declarations page and a full copy of the complete insurance policy to understand the extent of coverage available. In some cases, the policy may have exclusions or limitations that affect your claim. This is especially true in relation to work vehicles, where the type and amount of insurance coverage, as well as the specific situations which are excluded from coverage, can vary widely.
How is Insurance Coverage Affected by Whether the Vehicle is Being Used for Business or Personal Use at the Time of the Crash?
Generally, most personal auto insurance policies in Texas will exclude a vehicle from coverage if it is being used for business purposes at the time of a crash. The reverse is not always true, as some business auto insurance policies will still provide insurance coverage to vehicles belonging to the business if they are being used for personal tasks at the time of the crash, though this depends on the specifics of the insurance policy at issue.
One situation where this issue frequently comes up is in relation to rideshare services such as Uber or Lyft, or other services such as food delivery services where most of the people who drive for the service tend to use their own personal vehicles for performing the work they do for the service.
A regular personal auto insurance policy in Texas is extremely likely to exclude coverage for any situation where the insured vehicle is being used for work purposes. If you are in the process of driving for a rideshare service like Uber or Lyft, making a delivery for Grubhub or Postmates, or similarly using your personal vehicle for business purposes when it is involved in a crash, it is very likely that your personal auto insurance policy will not provide any coverage for any portion of the damages caused by the crash under the vehicle work-use exclusion. If your personal auto insurance policy includes uninsured/underinsured motorist coverage, it is extremely likely that coverage would also be excluded in a situation where you are using your personal vehicle for work purposes when a crash happens.
Because of the vehicle work-use exclusion that is part of most Texas personal auto insurance policies, most rideshare services make drivers who apply to work for the service purchase separate liability insurance to cover any potential damages to people or property that may result from the rideshare driver causing a crash. Most rideshare services will also offer their drivers an option to purchase uninsured/underinsured motorist insurance to cover any damages resulting from a crash caused by an uninsured or underinsured driver.
Uninsured/ Underinsured Motorist Claims are Generally Classified as First-Party Insurance Claims
Uninsured/Underinsured Motorist insurance claims generally fall under the category of first-party insurance claims. First-party insurance generally means you are an insured filing a claim with your own insurance company. This generally includes passengers an Uninsured/Underinsured motorist claim, and drivers or passengers who were in a borrowed vehicle or a company vehicle. The key factor that makes a claim a first-party claim is that the person filing the claim is insured by the insurance policy under which the claim is being filed.
If a claim does not fall under the category of a first-party claim, it is generally going to be classified as a third-party claim. A classic example of a third-party claim would be a situation where you are involved in a car accident caused by the other driver and you file a claim under the other driver’s insurance policy. In that situation, the other driver is the person who is insured by the policy under which the claim is being filed.
Why is this distinction between first-party claims and third-party claims important? Under Texas law, the rights and obligations of both the insurance company and the claimant differ significantly depending on whether the situation involves a first-party claim or a third-party claim.
Generally speaking, in a situation involving a third-party claim, the insurance company handling the claim does not owe any legal obligations to the person making the claim, because that person is not an insured or a policyholder. In these circumstances, often the best tool that a claimant has for holding the insurance company accountable and ensuring that their claim is properly and fairly evaluated is the Stowers doctrine.
Conversely, in a situation involving first-party insurance claims, the insurance company handling the claim owes significantly more legal obligations to the claimant than it does in a third-party claim scenario. These include:
- the legal obligation to handle the claim in accordance with the duty of good faith and fair dealing. USAA Tex. Lloyds Co. v. Menchaka, 545 S.W.3d 479 (Tex. 2018);
- the legal obligation to abide by the claim handling requirements of the Texas Insurance Code Chapter 541, the violation of which constitutes Deceptive Insurance Practices actionable under the Texas Insurance Code and the Texas Deceptive Trade Practices Act; and
- the duty to timely process and pay claims as required by Texas Insurance Code Chapter 542.
What is “Stacking” in Texas insurance law?
“Stacking” refers to the ability to combine multiple insurance coverages to increase the amount of compensation available after an accident. Stacking” occurs when an claimant covered by more than one insurance policy seeks to obtain benefits from two or more policies for damages caused by the same incident when the available benefits from the first policy alone would be insufficient.
One example would if you were injured in an accident caused by the other driver who only had the minimum liability insurance coverage required by Texas law in the amount of $30,000 per person for bodily injury coverage, you had uninsured/underinsured motorist coverage, and your medical expenses and damages from the crash exceeded the $30,000 of liability coverage available under the other driver’s policy. After reaching a settlement for the full amount of liability insurance coverage available to pay for your medical expenses and injury damages under the other driver’s policy, you could then make a claim under your insurance’s underinsured motorist policy to cover the gap between the amount of money obtained from the other driver’s insurance and your actual damages caused by the crash.
How does a PIP or Medpay claim potentially affect the amount available for a Uninsured/Underinsured Motorist Claim?
PIP insurance in Texas refers to Personal Injury Protection coverage. If you are involved in a crash, it covers things such as medical expenses, lost wages, and other nonmedical damages resulting from the crash both for you and for any passengers that were in your vehicle at the time of the crash. Uninsured/Underinsured Motorist coverage, PIP coverage generally falls under the category of first-party insurance. Under Texas law, PIP coverage must be provided as part of an auto insurance policy unless it is specifically rejected in writing.
Medpay insurance in Texas generally refers to medical payments insurance that may be offered under some insurance policies. This coverage generally pays for things such as medical payments and funeral expenses, but it is usually narrower in the scope of what it covers than PIP coverage. Unlike PIP and Uninsured/Underinsured motorist coverage, Medpay is not required to be offered as part of an auto insurance policy, and if it is included in the policy, Medpay coverage can vary significantly from one policy to another regarding what it covers and whether there are any special limitations or conditions applicable to Medpay coverage or Medpay claims under the policy. A claim for Medpay coverage, if included in an auto policy, would also be classified as a first-party insurance claim.
In Texas, Personal Injury Protection (PIP) or Medpay coverage can be stacked with uninsured motorist coverage. This means that the benefits from PIP or Medpay can be used in conjunction with UMBI coverage to cover medical bills and other expenses, potentially increasing the total amount of compensation you receive.
However, many Texas auto insurance policies provide for an “offset” from the total amount of compensation available for an uninsured/underinsured motorist claim based on any amounts paid out under a PIP or Medpay claim under the policy for damages arising from the same incident. For example, if you were injured in a hit-and-run collision where the other driver fled the scene without providing their insurance information and you made a PIP claim for $5,000 under your auto insurance policy and also made an uninsured motorist claim for damages from the same incident under your uninsured motorist policy, if your insurance policy contains an “offset” provision, the total amount of money available under your uninsured motorist policy would be reduced by $5,000, the amount you received under your PIP claim for the same incident.
However, the offset provision only applies in situations where there is an “overlap” between the amount of total damages covered by the PIP insurance and the UM/UIM insurance. In situations where the insured’s total damages are high enough to meet or exceed the UM/UIM policy limits minus the PIP/Medpay offset amount, the insured would be entitled to recover the maximum possible UM/UIM benefits.
The Texas Supreme Court clarified this important point in relation to how offsets are applied under Texas law in the UM/UIM insurance context in Mid-Century Texas Ins. Co. v. Kidd, 997 S.W.2d 265, 271 ( Tex.1999):
“Analyzing these three elements together, we construe the PIP offset provision as a nonduplication provision. To the extent UM/UIM-covered damages do not overlap with PIP-covered damages—for example, damages proximately caused by the insured’s own negligence—there is no corresponding PIP credit.[29] Also, the policy limits are applied after—not before—deducting the PIP credit. If an insured’s actual damages less PIP credits exceed her UM/UIM policy limits, then the insured recovers the maximum possible UM/ UIM benefits.
Accordingly, the only effect of the PIP offset provision is to bar double recoveries. It does not prevent stacking of UM and PIP protections to cover actual damages. Therefore, the offset provision neither reduces the UM/UIM policy limits nor causes an insured to recover less than actual damages sustained.”
How to Make an Uninsured Motorist Claim
To make an uninsured motorist claim, you must first report the accident to your insurance company and provide any necessary documentation, such as a police report and medical records. Promptly notifying your insurer ensures that your claim is processed efficiently. Most insurance policies include a provision that requires an insured to promptly notify the insurer after an accident. Waiting too long before notifying the insurer could lead to issues with the processing or handling of your claim, since one of the primary purposes of the requirement to timely notify the insurer is to allow the insurer to conduct an investigation of the relevant facts and circumstances relating to the claim and the crash causing the claim. The passage of time makes it harder to conduct an investigation, as evidence can disappear, the contact information of witnesses can change, and memories can fade. At some point, if enough time has passed before the insurer is notified of a claim, it may deny the claim alleging that the passage of time has prevented the insurance company from being able to properly investigate the claim, and the claimant did not abide by the requirement to timely report the claim to the insurance company which is stated in the policy. You want to avoid this situation and timely notify the insurance company about your claim as soon as it is possible to do so.
You may also need to provide a recorded statement and cooperate with any investigations conducted by your insurance company. Keeping detailed records and following the insurer’s instructions can help facilitate a smoother claims process.
Recorded Statements and Examinations Under Oath
In a third-party claim, a claimant generally has no duty to cooperate with the insurance company or provide it with any information. Although an insurance company will still often request recorded statements, documents, and other information in a third-party claim context, the claimant is not required to cooperate with the insurance company or provide any of the requested information.
Conversely, in a first-party claim, including uninsured/underinsured motorist claims, the insured generally has a duty to abide by the rules and conditions of the insurance policy, which will usually include language that requires the claimant to reasonably cooperate with the insurance company’s investigation of the claim and provide any reasonable information that is requested as part of the investigation.
Most of the time, the duty to cooperate includes providing a recorded statement or an Examination Under Oath (EUO) if one is requested by the insurance company in the course of conducting an investigation into your uninsured/underinsured motorist claim.
A recorded statement is exactly what it sounds like- the claims adjuster or other individual investigating the claim on behalf of the insurance company will ask you questions about the claim and record your answers. The recording may or may not be transcribed later, depending on the situation and what ultimately happens in relation to whether the claim is accepted or denied. Typical questions will include information about the accident and how it happened, as well as information about your injuries and damages for which you are seeking compensation as part of the claim.
An Examination Under Oath is similar to a recorded statement, but it is considered to be a more serious procedure. These proceedings begin with an oath the claimant takes to answer all of the questions truthfully, and the claimant’s answers are usually recorded and transcribed by a court reporter. Examinations under oath will generally cover the same topics that would be covered by a recorded statement, and they may be conducted by an insurance company adjuster, an investigator working for the insurance company, or an attorney. Recorded statements are sometimes done in person, but frequently they are conducted over the phone. Conversely, examinations under oath are done in person the vast majority of the time.
Insurance companies usually ask for recorded statements rather than examinations under oath, and examinations under oath are generally reserved for special situations when the insurance company believes that something may not be quite right about the information it is being presented. Of course, insurance companies will sometimes use Examinations Under Oath as a scare tactic to intimidate their own insureds into not moving forward with a claim, or accepting a low-ball offer or claim denial that is not really justified based on the facts and the evidence supporting the claim.
If you need to give a recorded statement or an examination under oath as part of the process of making your uninsured/underinsured motorist claim, it is important to be honest and thorough in your responses. You may also want to consult with an attorney before providing any statements to ensure that your rights are protected. If necessary, an attorney can be present with you while you provide a recorded statement or undergo an examination under oath to make sure that the insurance company is not taking advantage of the situation and using illegal or improper tactics when obtaining your statement or sworn answers/
Common Challenges in Uninsured Motorist Claims and How to Overcome Them
Common challenges in uninsured motorist claims include disputes over the extent of injuries, delays in processing claims, and disagreements about the amount of compensation owed. These issues can be frustrating and may require persistence to resolve. Despite the fact that these are first-party claims subject to the legal protections of the Texas Insurance Code and the duty of good faith and fair dealing, insurance companies will still often wrongfully delay, low-ball, or flat-out deny uninsured/underinsured motorist claims, especially in situations where someone is dealing with the insurance company by themselves without the help of an experienced and knowledgeable attorney.
To overcome these challenges, it is beneficial to keep detailed records, communicate clearly with your insurer, and seek legal assistance if necessary. An experienced attorney can help navigate complex issues and advocate on your behalf.
What if the Insurance Company Refuses to Pay or Only Makes a Low-Ball Offer?
If your insurance company refuses to pay your uninsured/underinsured motorist claim or makes an unreasonably low settlement offer and refuses to pay the full compensation you are fairly owed on your claim, you should consult an experienced and knowledgeable attorney to review and discuss your case with you, guide you through the legal process, and help you understand your options for seeking additional compensation. Often in these situations, it may be necessary to file a lawsuit to force the insurance company to change its tactics and come to the table in good faith with a fair offer to resolve your claim for an amount that fully compensates you for your injuries and damages.
Hire the Right Attorneys for Your Uninsured/Underinsured Motorist Injury Claim
The attorneys at the Kishinevsky Law Firm PLLC are here to help. Our law firm has helped numerous clients who were injured in a car accident to obtain full and fair compensation from insurance companies trying to wrongfully deny or low-ball their claim. If you or a loved one is was injured in a car accident and you need our help dealing with an uninsured or underinsured motorist claim, contact our office today for a free consultation.
In April 2015, Leonid Kishinevsky started the Kishinevsky Law Firm, focusing his practice primarily on personal injury litigation. As a personal injury lawyer providing representation to clients throughout the greater Houston area, he assists people who have suffered economic and noneconomic losses and harms due to the fault of other people or companies.