● 
INTRODUCTION
You are stopped at a red light in afternoon rush hour traffic. Without any warning, you are hit from behind by another motorist. The other motorist profusely apologizes for causing the accidnet but tells you all about his financial problems that caused him to let his automobile liability insurance lapse. Your neck and back symptoms slowly develop.
In a somewhat different scenario, you are rear-ended by a vehicle while you wait for the light to change to green. The offending vehicle immediately backs away from your vehicle, then passes you on the left to flee from the scene. Nobody gets a license plate number and the driver of that vehicle is never identified. You are physically injured in this hit-and-run accident.
When most of us purchase auto insurance, we do so with the aim of protecting ourselves financially against a situation where our driving errors may injure another motorist's property or person. Some of us may simply tell our insurance agents that we only want enough insurance to make our vehicle "street legal." In this economy, however, many of the drivers on the road are operating with no coverage at all or just the minimum legal coverage. Because of this, we should purchase insurance to protect ourselves and our passengers against these uninsured and underinsured motorists. This protection comes with the purchase of Uninsured Motorist Coverage ("UM") and Underinsured Motorist Coverage ("UIM") (A.R.S. Section 20-259.01).
● UM COVERAGE
In each case, you know your vehicle will be repaired under your own collision coverage (less the applicable deductible), but from what source will you be compensated for your medical bills, wage loss, pain and suffering and other consequential damages from the accident?
The answer is from your Uninsured Motorist Coverage. Your own insurance carrier essentially steps into the shoes of the negligent driver's carrier as if he had been insured. In Arizona, UM is no longer a mandatory coverage. If you do not want this coverage, you have to affirmatively decline it in writing. If you elect to purchase it, you can obtain coverage limits of up to the amount of your liability coverage. Thus, if your liability coverage is $100,000 per person/$300,000 per occurrence, you may purchase UM coverage with limits ranging from the statutory minimum of $15,000/$30,000 up to $100,000/$300,000. If the insurance company fails to have you decline this coverage in writing, it is presumed that you intended to purchase it at the same limits as your liability coverage.
● THE UM PROCESS
You have now completed your medical treatment and your accident-related injuries have resolved. The first thing you must do is prove to your UM carrier that the negligent driver was uninsured. There are several ways to accomplish this although some carriers require their insureds to jump through more hoops than other carriers to establish this. Oftentimes, the investigating police officer will issue a citation to the other driver for not possessing proof of automobile insurance. Evidence of the traffic citation and the court disposition may satisfy your UM carrier. Also, an affidavit from the other driver attesting to the fact that he was uninsured on the date of the accident usually works as well.
In the case of a hit-and-run accident, you obviously cannot get an affidavit from a phantom motorist nor will there be any citations issued. The law, therefore, presumes that a phantom motorist is uninsured. You still have to prove that you were hit by a vehicle that fled the scene and must establish this with corroborating evidence such as a paint transfer on your car from the fleeing vehicle or an independent eyewitness account of the crash.This is to protect the insurance company from paying claims where a motorist simply backs into a brick wall and reports being rear-ended by a fleeing motorist.
In a liability claim with an insured motorist, the matter proceeds to litigation through the court process if settlement negotiations reach an impasse. In a UM case, the most likely process is that of a three-member panel of private arbitrators. The claimant's attorney selects an arbitrator and the insurance company picks one as well. Usually, these two arbitrators will select a neutral third arbitrator who is sometimes referred to as the umpire. The arbitration is usually held in a law firm's conference room where the arbitrators listen to and rule on the evidence. Their decision may or may not be binding on the parties, depending upon the language of the insurance contract.
More recently, however, many insurance companies have changed the language of their contracts where the decision is not binding, giving either party the right to appeal the decision by filing a lawsuit in Superior Court. This de novo appeal means that the case is completely tried from scratch without any regard to the earlier decision made by the arbitration panel.
● PORTABILITY OF COVERAGE
The protection offered to one with UM coverage is portable. It not only affords coverage to you while you are in your own car but also when in a non-owned car, while riding a bike or walking as a pedestrian, so long as your physical injury is caused by an uninsured motorist. As an extreme example of UM's portability, if you are sitting in your home watching television and an uninsured motorist crashes through your house and injures you, your UM coverage protects you.
● UIM COVERAGE
Underinsured Motorist Coverage ("UIM") comes into play when the negligent driver's liability coverage is insufficient to fully compensate an injured party for his damages. Thus, after you exhaust the negligent driver's liability policy and prove to your UIM carrier that you have exhausted this coverage (and any other coverage the negligent driver may have under other policies), you then may move on to your own coverage to obtain the rest of your damages. Your UIM carrier will get a credit to the extent of the payment made to you by the negligent driver's liability coverage. As an example, assume your injury claim has a full value of $35,000.00 and you collect the policy limits from the negligent driver's carrier of $15,000.00. You then have an opportunity to collect the remaining $20,000.00 from your UIM coverage. As with UM, any dispute with your carrier will ultimately be decided by a panel of arbitrators or by the court.
● CONCLUSION
In summary, you must not only protect yourself financially from your own negligence but you must also protect yourself from the negligence of others. UM and UIM insurance, together with liability insurance, are essential to insuring that accidents with injuries caused by you or another do not financially devastate you.
Richard K. DePonte rdeponte@mclawfirm.com
