Underinsured Motorists

Is Underinsured Motorist Insurance Coverage
Mandatory in Texas?

Although Texas requires that underinsured motorist coverage be offered on each policy, it is not mandatory. In other words, your agent must offer underinsured motorist coverage, but you have the right to reject this coverage. Any rejection of underinsured motorist coverage, also called UM coverage, must be in writing.

In order to be eligible for underinsured benefits, you, or the vehicle you are occupying, must carry underinsured motorist coverage. Underinsured motorist coverage is only available when the responsible third party in an accident does not have enough insurance to cover your damages.

Underinsured motorist coverage usually comes in the following policy limits: 30/60, 50/100, 100/300. The policy limits depend upon the amount of coverage purchased on the insurance policy.

If you have a 30/60 policy, this means that the insurance company will pay no more than $30,000 to any person, and no more than $60,000 for the whole accident.

To better explain, assume that Larry and Moe, riding in Larry’s car, are severely injured in a car accident caused by John Doe who has minimum liability insurance of $30,000. Assume that Moe has $48,000 in medical expenses, and that John Doe’s insurance company has agreed to pay Moe the liability policy limits of $30,000. Further assume that Larry, as the driver, carries underinsured motorist coverage of $30,000.

Upon receiving notice from John Doe’s insurance company that it has agreed to pay Moe the $30,000 policy limits, Moe must seek written permission from Larry’s underinsured motorist carrier to accept the settlement. Failure to acquire written permission to settle from Larry’s underinsured motorist carrier prior to a formal settlement may void underinsured motorist coverage.

Once Moe has obtained written permission to settle the liability claim, Moe can then proceed with submitting his underinsured motorist claim to Larry’s insurance carrier. Larry’s insurance carrier will then consider Moe’s injuries and damages, likely extending an offer to settle Moe’s claims within the underinsured motorist policy.

Am I Allowed to “Stack” Insurance Benefits?

If the vehicle I occupy has underinsured motorist coverage, but I, as a passenger, also have underinsured motorist coverage on my own policy, am I allowed to stack the benefits?

First, let us define what it means to “stack” insurance benefits? To “stack” benefits means that you can collect benefits from multiple policies on a single claim. And, in Texas, you are indeed allowed to stack underinsured motorist benefits on a particular claim. Applying the above example, if Moe, as a passenger, carried his own underinsured motorist coverage of 30/60, then Moe would be entitled to stack the benefits as follows: Moe would be entitled to John Doe’s liability policy of $30,000, then Moe could collect the $30,000 underinsured benefits from Larry’s policy, and then Moe could collect the $30,000 underinsured limits from his own policy; assuming that Moe’s case was worth at least $90,000.

Don’t Delay! Call Us Now Before Time Runs Out!

If you have suffered a serious injury from an auto, motorcycle, or 18- wheeler accident, and you have concerns that the liable driver does not have enough insurance to cover your damages, then you should consult with one of our Houston personal injury attorneys who have the experience to assist you with your claim. Contact the Houston law firm of Joel A. Gordon & Associates promptly for a free consultation with one of our lawyers.