When the defendant does not have insurance, or does not have enough insurance to fully pay for the plaintiff’s personal injuries and damages, then the plaintiff’s own insurance company supplies the cool, crisp, icy glass of water on what is otherwise just a hot, dry, dusty day.

Let’s hear it for UM coverage.

Hunting for UM coverage

While UM (or Uninsured Motorist) coverage may not rain down from the sky like lemondrops, it does originate in more places than the obvious.

First, obviously, there is the obvious source: the plaintiff’s own insurance policy. Obviously.

But where else? Ahh.. Consider all other vehicle policies of every member of the plaintiff’s household. . Notice I said vehicle policies, not automobile policies.

So motorcycles, ATVs, mopeds(?) …. all of these should be under suspicion.  Round up all the unusual suspects.   Once you’ve identified all of them, ask yourself, are any of the people that these policies belong to “relatives” of the plaintiff?

If so, bravo. These policies potentially contain UM coverage available to the plaintiff. (WOOOHOO!)


 

Add-on vs. Reduced 

Let’s step back and discuss for a minute the types of UM coverage.  This won’t take long.

Before January 2009 there was only one kind of UM coverage. But it was silly.  So, in 2009 it changed.  When it changed, most people’s UM insurance became a better kind.  Unless they wanted to stick with the original silly kind. Which they could.

Add-On UM Insurance 

The better kind.

Assuming the plaintiff took out enough, the better kind of UM coverage fills the space between what the defendant has (whether $0 or more) and what the plaintiff needs (i.e., plaintiff’s damages).

Reduced UM Insurance

Now for the silly kind.

The silly kind of UM coverage essentially replaces the defendant’s insurance. It is only useful if the amount of UM insurance is more than the amount of liability insurance the defendant has. If and only if the plaintiff’s UM insurance limit is greater than the defendant’s available liability insurance, then the plaintiff’s UM carrier will pay that difference.


 

Stacking 

Stacking, a term that often pops up in the UM context, refers to which UM carrier is first up to bat.

Stacking rules govern which carrier must pay first, and which pays last, and which carrier (when a reduction policy is involved) gets to pay less by claiming the credit equal to the amount of available liability insurance.

The plaintiff should just be aware that you can only stack policies – not coverages.  In other words, if it exists in a whole separate policy it qualifies as a separate source of UM funds; a “block,” if you will – a stackable “block” for stacking.

To be sure, even if each separate policy is issued to the same person, they still count.  And, even if the policy is issued to someone other than the plaintiff, but under which the plaintiff qualifies, then it too is a stackable block.

But stacking is really the insurance company’s problem – not the plaintiff’s.

The plaintiff’s only job is to timely and properly serve all UM carriers and the umbrella carrier.  And then to sit back and let them have at it.


 

What is the actual procedure for recovering under UM Insurance?

In UM cases–as in all cases–you must first obtain service on the defendant.  Then you must prove liability, so as to secure a judgment against the defendant.

It is the judgment against the defendant that entitles the plaintiff to payment from the UM carrier.

The rub here is that settlements often occur before a judgment against the defendant is secured.  The key to success in UM cases, then, hinges on steps taken at the outset: proper service on the defendant AND proper notice to the UM carrier.

1. Proper service on the defendant

To recover under the plaintiff’s UM coverage, you must either have, or be in a position to secure a judgment against the right kind of defendant.

To be in a position to secure a judgment against the right kind of defendant:

  • The defendant must be a UM-type defendant;
  • You must effectuate proper service of process on him/her.

Types of UM Defendants

Certain types of defendants implicate UM coverage.  When a defendant is Deadbeat, Disappeared, Deficient, or Doe, warm up your photocopier; you’ll be needing it to send copies of the Complaint to the plaintiff’s UM carrier.

For the first three types of defendants, the plaintiff must effectuate personal service of process.

  • Deadbeat Defendant: No insurance
  • Disappearing Defendant: Whereabouts is unknown
  • Deficient Defendant: Underinsured

How do you know your defendant is underinsured?  Is it in the shimmery glint of his eye? Is it in the way he walks? Is it in the way he talks? Is it all up there right in his air? Is it all up there right in his hair? Is it cuz he’s debonair? Do we even really care? Ahem.

The correct answer is False.

Whether your defendant is underinsured has nothing to do with him.

It has everything to do with the plaintiff.  You see, when it comes to underinsuredness, the defendant’s policy limits are like the question of negligence; underinsuredness in the air, so to speak, is not enough. Asking whether the defendant is under-insured is identical to asking “Does she have enough?

Enough…?” the defendant would tepidly inquire, “Enough for what…?

And that is the question: Enough for what?

The response? “Enough to cover the plaintiff’s damages!

In short, to determine whether the defendant is uninsured, you look to the plaintiff’s damages. If they exceed the defendant’s policy limits, then you, my friend, have a UM case: the defendant is under-insured.

But having an “underinsured” defendant as opposed to a plain ol’ vanilla “uninsured” defendant does not mean much. In fact, it doesn’t really mean anything.  It may be a different flavor, but at the end of the day it’s still UM.

So for the first three types of UM Defendants (Deadbeat, Disappearing, or Deficient), just remember that the manner of service is the same — Keep it personal (i.e., Personal Service of process).

But the Doe defendant is different.

Serving the Doe Defendant

He hit the plaintiff – but he never stopped.  Or, he hit someone else, who in turn hit the plaintiff, and he never stopped. Or, he almost hit someone, who hit the plaintiff (and at least two people saw him, but we’ll get to that another day), and he never stopped.

Either way, he is a Doe defendant.

Service for him is different. It’s not personal. It can’t be. Because John Doe doesn’t exist.

So what do I do?

Easy. You serve the Doe defendant by publication.

Remember, no matter how the defendant is served, in all UM cases, you must send a copy of the pleadings to the UM carrier.

2. Proper service on the UM carrier

Once the defendant is properly served, a UM case differs from a regular (straight liability) case in only one way:

You serve a copy of the complaint on the UM carrier.

That’s it?

That’s it.

On to the next topic then?

Not quite.

Notice that the procedural difference was merely that the UM carrier is served with a copy of the Complaint. You are merely serving the UM carrier with a duplicate of the lawsuit you filed against the defendant(s).

You do not name the insurance company as a defendant.

You do not. You may want to. You just don’t.

Ok. Are we done now?

Almost.

To clarify, the insurance company is not a named defendant at this point.  But it can become one.  If it wants to.

You see, when served with the Complaint, the UM insurance carrier has three choices: 

  1. It can file an Answer in the name of the defendant,

  2. It can file an Answer in its own name, OR

  3. It can sit back and do nothing.

It can do nothing because the UM carrier is not an actual defendant in the case.

It is not.

If, however, the UM carrier goes with Door Number 2, and files an Answer in its own name, now it is open-season.  Power up your word processor, and change the pleadings: You’ve reeled in a UM named-defendant.

From that point on, slap the UM carrier’s name up there in the pleadings and treat the UM carrier just as you would any other defendant.

Alright, we’re done here now, right?

Not quite.

Let’s back-up. I misspoke.  When I said “treat the UM carrier just as you would any other defendant,” what I meant to say was, treat it that way until you can’t anymore.

To clarify, while the UM carrier, by virtue of having answered in its own name, now looks like a regular ol’ defendant, you should remember that looks can be deceiving: The UM carrier is not exactly a regular ol’ defendant.

The UM carrier is a special kind of defendant – the unicorn of defendants, if you will.

You see, the UM carrier can change its mind. 

At any point, the UM carrier may withdraw its Answer and then you’re back to square one: The UM is no longer a named-defendant. Time to shake the White-Out.

What’s going on here is that by filing an answer in its own name, the UM carrier becomes a party and can do everything a party can do; serve discovery, notice depositions, file motions, etc.  But, those rights, for the UM carrier, come at a hefty price.  As we all know, rights entail liabilities.

When the UM becomes a party to the case, *bam* its name appears on the pleadings.  And those pleadings may be viewable by the jury.

And, as we all know, if there’s one thing that can make a jury feel exceptionally comfortable handing down a big verdict, it is the word “insurance.”

So, when the UM carrier is done playing defendant, unlike the rest of us, it has the option of taking its ball and going home. The UM carrier may withdraw its Answer and *poof* the UM carrier’s name vanishes from the pleadings.

Ladies and gentlemen, the UM prestige. It’s like it never even happened.

The main reason why a UM carrier theoretically might not take advantage of this secret trap-door option–and would instead allow itself to remain a party all the way through trial–is if the carrier does not agree that it is on the hook for the plaintiff’s problems in the first place.  In other words, the UM carrier might decide to remain in the case if it disputes that the plaintiff was even covered by UM insurance.  Remaining a named-defendant would allow two questions – the question of coverage AND the question of liability – to both be wrapped-up in one tidy lawsuit.

Oh. Um. Okay – So at what point do you serve the UM carrier?

The minute it starts seeming like the defendant’s liability insurance may not be enough.

OR

As soon as it becomes clear that some unidentified individual caused the accident

OR

Once you realize you cannot personally serve one of your defendants because she has now disappeared.

And, if you’re not quite fully sure, just go ahead and serve the UM carrier with a copy of the complaint.  You really cannot serve them too early.  But you can serve them too late.

So serve them. Then, agree to a dismissal of the UM carrier without prejudice.

Okay, what else?

Nothing.


 

Watch video How to write a great demand letter.