The purpose of Underinsured Motorist Benefits is to compensate you in case you are injured in an automobile collision and the negligent party does not have enough insurance to compensate you fully for your damages.

In Pabley v. Commerce Insurance Co. (Worcester Superior Court - C.A. No. 12-335-09) the Massachusetts Superior Court reaffirmed the limits available for optional Underinsured Motorist Benefits.

The Court held that the maximum available coverage for Underinsured Motorist Benefits (”UM”) in Massachusetts is the difference between the UM Coverage and the negligent responsible party’s Bodily Injury (”BI”) Coverage.  In Pabley, the plaintiff had optional UM Coverage through Commerce Insurance in the amount of $250,000.  The negligent responsible party’s BI Coverage was $50,000.

The BI Insurer offered the full $50,000 to settle the plaintiff’s personal injury claim against its insured.

The plaintiff and Commerce Insurance arbitrated the plaintiff’s UM claim as required by the Standard Massachusetts Automobile Insurance Policy when the claimant and UM insurer cannot agree on a settlement amount.  The arbitrator awarded $385,000 in damages.  Commerce Insurance issued a check for $200,000, i.e. the difference between the $250,000 UM Coverage limits and the negligent party’s BI Coverage limits.  The plaintiff demanded the full $250,000 UM Coverage limits.

The Court decided in favor of Commerce Insurance reaffirming a 1995 SJC decision in the case of Hanover Insurance Co. v. Pascar.

The Massachusetts Standard Automobile Insurance Policy allows the UM insurer to take an offset from the compensation paid by the negligent party’s BI Insurer.  Should the offset be calculated from the claimant’s actual damages or from the coverage amounts available through the two insurance policies?

The Court decided that MGL c. 175 §113L provides, essentially, that the amount of available coverage in a UM Claim is determined by subtracting the amount of available BI Coverage from theUM Coverage.  If the BI Coverage is for the same amount as the UM Coverage, there is no UM Claim for Underinsured Motorist Benefits.  If the BI Coverage is less than the amount of the UM Coverage, then the amount of available UM Coverage is the difference between the coverage contained in the two insurance policies.  (In Pabley, $250,000 - $50,000 = $200,000 available UM Coverage.)

Copyright © 2010 John J. Sheehan

First, you should always have a pad of paper or small notebook in your car and a pen that actually works.

If you’re involved in a car accident, you should immediately record the date/time of the accident. Check the name of the street and the street number of the nearest house or building or, at least, the names of nearby businesses to establish the location of the accident.

You will need to exchange information with the other driver. Take out your driver’s license and registration and exchange with the other driver. Write down the other driver’s name, address, date of birth, driver’s license number, registration or license plate number and name of the insurance. Be sure to confirm with the other driver that his or her home address and insurer listed on the registration is still up to date.

If the driver of the car that hit you is not the owner of the car, be sure to get the complete name and address of the owner.

If there are any witnesses, be sure to get their name, address and telephone number. Ask them what they saw and who they believe was at fault.

You need to report the accident immediately to your insurance company. Many insurance companies have a 24 hour telephone number for reporting new accidents. If not, be sure to report the accident to your insurer the next business day. Be sure to report the accident to your insurer within 24 hours from the day of the accident.

You must complete a Massachusetts Operator’s Report and file it with the Massachusetts Registry of Motor Vehicles and send a copy to your automobile insurer and the local police station where the accident occurred.

If you were injured as a result of the car accident, you should see a doctor or go to the emergency room immediately. If you require emergency medical care at the accident scene, dial 911 and ask for an ambulance and police to response to the accident scene.

If you are injured in a car accident, call a lawyer who specializes in personal injury law. Don’t wait. Call a lawyer right away.

Copyright © 2009 John J. Sheehan