Your purchase of high insurance limits can also help you or your family members when one or more of you are injured through the fault of another driver.
How does this work? As an example, let us say the negligent driver purchased a $25,000/$50,000 auto liability insurance policy, and you have a policy that provides $100,000/$300,000 in UM coverage. Your injuries are serious. Your medical bills are substantial. In your lawsuit against the driver, a jury awards you $100,000 in damages. The defendant driver's insurance will pay you only $25,000, the maximum amount of liability coverage the defendant bought which can be paid to one person with respect to one accident. However, you can look to your own UM coverage to see if there is underinsurance coverage (UIM) available to you.your insurance company would pay you $75,000 in underinsurance coverage.
How do you arrive to the $75,000 figure? It happens this way. Under Virginia law, if there is UM coverage available to you in an amount greater than the defendant's liability coverage, you will have underinsurance coverage. If not, there will be no underinsurance for you. The availability of underinsurance coverage depends on a comparison between a specific defendant's liability coverage and the UM policy which provide you coverage. With regard to the above example, your own insurance company would pay you $75,000 because the amount by which your own UM motorist coverage exceeds the defendant's liability coverage of $25,000. By adding your $75,000 in underinsurance coverage to the defendant's $25,000 liability limits, the $100,000 judgment against you would be paid in full.
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