Zimmer, Duncan & Cole

Protect Yourself From Under-Insured Drivers

A teenage driver is severely injured when her car is struck by another vehicle. She and her parents now face hundreds of thousands of dollars in medical bills. The other driver has almost no insurance coverage. Fortunately, her parents have "underinsured motorist" coverage for exactly this type of situation. And, since her parents are divorced, she actually has two separate policies, for $100,000 each. Our state Supreme Court decides whether she can use both policies in DeSmet Insurance Company v. Tabitha Pourier (2011 S.D. 47).
But before we talk about that case, I want to take quick detour and answer a reader question, thanks to G.M. of Lennox.
She recently purchased $300 worth of merchandise from a kiosk while down in Arizona. She later tried to return the items... but was told she couldn't because of the "fine print" on the receipt. (Of course, since the receipt was handed to her after the sale, it's probably too late for that disclaimer to count against her.) In response to her phone calls, this Arizona business gave her the runaround. She then used our website to ask what she should do and whether she needs a lawyer. And she also realizes that a lawyer may not even be cost effective for a small transaction like this.

My answer is that G.M. already has a lawyer to help her, and the price is too good to be true. The cheapest and most effective way of handling consumer issues like these is to contact the state Attorney General's consumer protection division. Each state has one. It's free. And it's their job to help you.

Because her transaction occurred in Arizona, I directed her to that state's consumer protection website. Some states have better consumer protection than others, so G.M. may need to take some additional steps to get the matter resolved. But that's at least a good place to start.

When you request help from them, be as detailed as you can. Give them copies of all the papers and documents about the transaction. Also, a timeline is often helpful.

Now, on to this week's case...
A teenager named Tabitah Pourier was seriously injured when her Plymouth Neon was struck by another vehicle. The car accident occurred in Pennington County. Tabitha's medical bills exceeded a quarter of a million dollars. And although the other driver was at fault, he carried only the state minimum level of coverage on his vehicle ($25,000).

Tabitha lived with her father, who listed her as an insured driver on his auto policy with DeSmet Insurance. However, the Neon itself was insured by her mother's insurance company (GEICO). The GEICO policy included $100,000 in "uninsured/underinsured motorist coverage" (also called UM/UIM). With this coverage, your own insurance company guarantees that you'll have at least that much insurance available for your injuries, even if the other driver has no insurance or not enough. Since the driver already had $25,000 in coverage, GEICO chipped in the remaining $75,000, for a total of $100,000 toward her damages.

Meanwhile, Tabitha's father had also paid for $100,000 in underinsured coverage for his daughter on the DeSmet policy, which they also hoped would help pay for the injuries. The question in this case is whether Tabitha could use both UIM policies. In a split decision, 3-2, the Court said that Tabitha only gets the benefit of her mom's policy because of how the DeSmet policy was worded.

This is unfortunate. However, if you're doing the math, you see that there still wouldn't have been enough insurance to cover all the medical bills even if the Court had allowed both UIM policies to be used. (And that's not even counting her damages for disability, pain, disfigurement, lost wages from her part-time job, etc.)

Her parents merely had the basic level of underinsured motorist coverage, $100,000. For any serious accident, that's rarely enough. The lesson here is that Tabitha's parents could have asked for more.

If you follow only one piece of my advice this year, please make it this one:  call your car insurance agent today and ask for more uninsured and underinsured motorist coverage. You'll be surprised by how little it costs to move up to $250,000. For just a bit more, you can bump it up to a million dollars and add an "umbrella" policy to increase your family's protection.

Extra coverage is the cheapest peace of mind you'll buy all year.