What is Underinsured Motorist (UIM) Insurance?

Underinsured Motorist (UIM) Insurance is an optional automobile insurance coverage that protects you, the injured insured, when your personal (bodily) injury damages exceed the amount of the negligent driver’s Bodily Injury (BI) liability insurance limits. 

Unfortunately, in Wisconsin, your available UIM limits can be reduced (and almost every Wisconsin insurance contract will contain this “reducing clause”) by the BI limits of the negligent driver’s automobile insurance.  See Wis. Stat. 632.32(5)(i)1

A Wisconsin example:  If an injured person had $100,000 of UIM coverage and the negligent driver had $50,000 of BI insurance coverage, but the injured person sustained $125,000 in personal injury damages, the most the injured person could recover from both insurance coverages would be $100,000 and the injured person would have $25,000 of uncompensated damages.  In other words, due to the reducing clause for UIM benefits, the injured person’s $100,000 UIM limit would be reduced by the $50,000 of BI coverage.  Therefore, $50,000 of net UIM coverage would exist.  $50,000 of BI coverage plus $50,000 of net UIM coverage totals $100,000.

In Wisconsin, an injured person must recover every penny of the underlying BI coverage and provide notice to their own UIM insurance company (a Vogt notice) before the injured person can accept the BI settlement and proceed with a claim for UIM benefits. 

As with Wisconsin Medical Payment coverage and Uninsured Motorist (UM) coverage, UIM coverage is a “back pocket” coverage available in any personal injury claim involving a motor vehicle collision.  This means the coverage is carried with the person even if they are injured while a pedestrian or bicyclist and have been struck by a negligent driver of a motor vehicle. 

If you have questions about UIM insurance, contact Wagner Law, LLC.