Understanding your Uninsured and Underinsured Motor Vehicle Coverage
Like virtually every other state, Maine has enacted a “financial responsibility” law which requires owners and operators of motor vehicles that are registered in this state to maintain minimum levels of motor vehicle financial responsibility. Do you know if your motor vehicle is uninsured or underinsured? The vast majority of people comply with Maine’s financial responsibility law by obtaining an automobile insurance policy that provides at least the following minimum amounts of coverage:
(1) $25,000 for property damage;
(2) $50,000 for the injury to or death of any one person;
(3) $100,000 for the injury to or death of more than one person; and
(4) $2,000 for medical payments.
If you have ever taken a look at your insurance policy (if you haven’t yet, you should), you are probably at least generally aware of the property damage and bodily injury liability insurance that you have and how it operates. However, one aspect of the insurance policy that is often overlooked and/or misunderstood is “uninsured” and “underinsured” motorist (“UM” and “UIM”, respectively) coverage. By law, each automobile insurance policy issued in Maine must include UM/UIM coverage.
This coverage is incredibly important: whereas your bodily injury liability insurance protects others who are injured in an accident that you have been involved in, your UM/UIM coverage potentially protects you. In simple terms, an “uninsured” motorist is one that either (a) lacks any insurance, or (b) you cannot identify (for example, a hit and run scenario where the other driver fled the scene before you were able to identify them). Along those same lines, an “underinsured” motorist is one who has insurance, but in an amount less than either (a) the minimum amount required by law (i.e., currently $50,000 per person or $100,000 per occurrence); or (b) the amount of bodily injury insurance coverage that your policy provides. An example of the latter scenario would be if your insurance policy provides for $100,000 in bodily injury coverage per person, but the other driver’s insurance policy only provides for $50,000 per person. In that instance, the other driver would be “underinsured” by $50,000.
Generally speaking, Maine law requires your insurance policy to provide you with UM/UIM coverage in the same amount as your bodily injury liability coverage. So if for instance your policy provides $100,000 in coverage for bodily injury liability to others, it must also provide you with $100,000 in UM/UIM coverage. There is a caveat to that, however: you, the purchaser, can choose to reject equal coverage. To do so, you must sign a written form that contains certain language. However, even if you reject equal coverage, the insurance company still must provide you with UM/UIM coverage in an amount at least equal to the minimum mandatory bodily injury liability coverage amount as set forth above.
So, why is any of this important? There are a couple of reasons. First and foremost, understanding your UM/UIM coverage can potentially help you protect yourself. While you have the right to reject equal coverage and instead go with the minimum UM/UIM coverage required by law, you should think long and hard before you do so. The financial impact from a car accident—hospital bills, prescription medications, lost wages, pain and suffering, etc.—can be overwhelming. Why would you want to provide yourself with less protection than you provide to strangers? This is particularly so in light of the fact that the amount of money you can save by rejecting equal coverage is typically negligible. Additionally, being aware of your UM/UIM coverage is important in case you ever find yourself in the situation of having been involved in an accident with an uninsured or underinsured motorist. The first step in making a claim for UM/UIM benefits under your policy is being aware that the coverage exists.
These materials have been prepared by Rudman Winchell for educational purposes only. They should not be considered legal advice. The transmission of this information to you is not intended to create a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel. You should not send any confidential or private information to Rudman Winchell until a formal attorney-client relationship has been established, in writing.
 29-A M.R.S. § 1601(1).
 As an alternative to obtaining automobile insurance, a person can also satisfy the financial responsibility law by depositing money and/or securities with the State of Maine in an amount equal to the minimum amounts of mandatory insurance coverage. 29-A M.R.S. § 1605(3)&(4). This option is infrequently used, and is outside the scope of this article.
 29-A M.R.S. § 1605(1)(C).
 24-A M.R.S. § 2902.
 24-A M.R.S. § 2902(2).