Mike’s Quick Answer
It depends on the limits and the policies that cover the injured person, but often underinsured motorist coverage, called UIM, provides a potential additional recovery when the at-fault driver's liability limit is lower than the injured person's applicable UIM limit. It matters because a serious injury can exceed a minimum or modest liability policy quickly, and the UIM claim must be preserved before the liability case is released.
UIM Is Coverage You Buy for Someone Else's Shortfall
Liability coverage protects a driver against claims made by other people. UIM coverage protects an insured person and other qualifying claimants when a negligent driver carries a lower liability limit.
The comparison is policy-specific. The injured person's UIM limit generally must exceed the at-fault driver's liability limit for a New Jersey UIM claim to exist. The declarations page should be reviewed together with household, employer, rideshare, and vehicle policies.
The Carrier Still Evaluates Fault and Damages
A UIM carrier does not automatically pay the difference between two policy limits. It can evaluate comparative fault, causation, treatment, prior conditions, wage loss, case value, and compliance with notice and cooperation provisions.
Available UIM benefits may also be affected by policy language, multiple claimants, other applicable policies, and amounts recovered from responsible parties. A limit is a ceiling, not a promised payment.
Why Early Review Matters
Before accepting the at-fault limit, the UIM carrier may be entitled to notice and an opportunity to protect subrogation rights. In New Jersey, that process is often associated with a Longworth notice.
Mike would obtain certified liability limits, all potentially applicable declarations pages, the proposed release, and evidence concerning every responsible person or business. Signing first and investigating later can create a preventable coverage fight.
Frequently Asked Questions
Is UIM the same as uninsured motorist coverage?
It depends on the event, but they address different shortages. UM commonly applies when the responsible driver has no applicable insurance, while UIM concerns a driver whose liability limit is lower than the applicable UIM limit.
Does the Basic Policy include UIM coverage?
It depends on the exact policy, but New Jersey's published comparison states that the Basic Policy does not include the UM or UIM protection available with a Standard Policy. Other policies still should be investigated.
Sources and Further Reading
Important
This article provides general New Jersey information and is not legal advice. Every matter depends on its facts, policy language, deadlines, and applicable law. Medical questions should be discussed with a licensed physician. Tax questions should be discussed with a qualified tax professional.