Nebraska Legal Help for Underinsured Motorist Claims

Understanding Underinsured Motorist Coverage in Nebraska

Underinsured Motorist (UIM) coverage is a crucial, yet often misunderstood, component of auto insurance policies in Nebraska. It is designed to protect you when you are involved in an accident caused by a driver whose liability insurance limits are insufficient to cover the full extent of your damages. Nebraska law requires all auto insurance companies to offer UIM coverage to their policyholders. While you have the right to reject this coverage in writing, doing so can leave you financially vulnerable. UIM coverage essentially acts as a financial safety net, bridging the gap between the at-fault driver’s policy limits and the actual cost of your medical bills, lost wages, and pain and suffering.

Nebraska’s Insurance Laws and UIM Requirements

Nebraska is a “fault” car insurance state, meaning the driver who causes an accident is responsible for compensating those they injure. State law mandates minimum liability insurance requirements for all registered vehicles. As of now, these minimums are:

$25,000 for bodily injury or death per person.
$50,000 for total bodily injury or death per accident.
$25,000 for property damage per accident.

However, these minimums are often inadequate in serious collisions where medical expenses can quickly soar into the hundreds of thousands of dollars. This is where your own UIM coverage becomes critical. When you purchase UIM coverage, you select a policy limit, such as $100,000/$300,000. If an at-fault driver only carries the state minimum of $25,000, your UIM coverage can provide an additional $75,000 (up to your $100,000 per person limit) to cover your losses.

The Critical Difference: Uninsured (UM) vs. Underinsured (UIM) Motorist Coverage

It is vital to distinguish between Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage, as Nebraska law requires insurers to offer both.

Uninsured Motorist (UM): This coverage applies when the at-fault driver has no auto insurance whatsoever, is a hit-and-run driver, or their insurance company is insolvent.
Underinsured Motorist (UIM): This coverage applies when the at-fault driver has insurance, but their policy limits are lower than the total value of your damages and lower than your own UIM policy limits.

Many Nebraska policies bundle UM and UIM together. Carefully review your declarations page to understand the specific limits you have purchased for each.

How an Underinsured Motorist Claim Works in Nebraska

Navigating a UIM claim involves a specific process with your own insurance company. Unlike a standard third-party claim against the at-fault driver, a UIM claim is a first-party claim, meaning you are making a claim on a policy for which you pay premiums. The typical steps are:

Exhaust the At-Fault Driver’s Policy: Before your UIM coverage can be accessed, you must first obtain a settlement for the full policy limits of the at-fault driver’s liability insurance. Your UIM insurer will likely require written confirmation that this step is complete.
Formally Notify Your Insurer: Once the at-fault driver’s limits are exhausted, you must formally notify your insurance company of your intent to pursue a UIM claim. This involves submitting a demand package that details your damages, including medical records, bills, proof of lost income, and documentation of your pain and suffering.
Investigation and Evaluation: Your insurer will assign an adjuster to investigate your claim, much like the other driver’s company would. They will evaluate whether your damages truly exceed the at-fault driver’s limits and the value of your claim up to your UIM policy limits.
Potential Disputes and Litigation: It is common for there to be a dispute between you and your insurer over the value of your claim or whether the other driver was indeed underinsured. If a fair settlement cannot be reached, your policy likely contains an arbitration clause. If arbitration fails or is not required, you may need to file a lawsuit against your own insurance company to recover the UIM benefits you are owed.

Common Challenges and Disputes in UIM Claims

Policyholders often face several hurdles when pursuing a UIM claim. Insurance companies are for-profit businesses, and paying out large UIM claims affects their bottom line. Be prepared for potential challenges:

Disputing Fault: Your insurer may argue that the other driver was not fully at fault, attempting to reduce or deny your UIM recovery based on comparative negligence laws.
Valuing Your Damages: The largest area of conflict is often the true value of your claim. Your insurer may undervalue your pain and suffering, future medical needs, or lost earning capacity.
Policy Stacking: Nebraska allows for “stacking” of UIM coverages. This means if you have multiple vehicles on a policy, you may be able to combine (stack) the UIM limits for each vehicle to create a higher total limit. Insurers often resist stacking, and the language in your policy must be carefully analyzed.
Setoffs and Deductibles: Your policy may include provisions that allow the insurer to subtract (or “setoff”) the amount you received from the at-fault driver from your total UIM limit. For example, if you have $100,000 in UIM coverage and received $25,000 from the other driver, the insurer may argue your maximum UIM recovery is $75,000.
Arbitration Clauses: Most UIM policies require disputes to go through binding arbitration instead of a court trial. This process has its own rules and procedures, and the outcome can be difficult to appeal.

Why Legal Representation is Crucial for UIM Claims

While it is possible to handle a simple property damage claim on your own, pursuing a significant underinsured motorist claim is a complex adversarial process. Having an experienced Nebraska personal injury attorney is invaluable for several reasons:

Navigating Complex Policy Language: Attorneys understand the intricacies of insurance policies, including stacking provisions, setoffs, and arbitration requirements.
Accurately Valuing Your Claim: Lawyers have the resources to properly calculate all past, current, and future damages, ensuring you demand full and fair compensation.
Handling Negotiations and Bad Faith Tactics: Insurance adjusters are skilled negotiators. An attorney levels the playing field and can identify and counter tactics designed to minimize your payout. They can also advise on whether an insurer’s actions may constitute “bad faith,” which is a violation of Nebraska insurance law.
Preparing for Arbitration or Litigation: If your claim cannot be settled, an attorney is essential for building a strong case, presenting evidence, and advocating for you in arbitration hearings or in court.

Steps to Take After an Accident with an Underinsured Driver

Your actions immediately following a collision can significantly impact a future UIM claim.

Seek Medical Attention: Your health is the priority. Even if you feel fine, get checked by a doctor. Some injuries manifest hours or days later, and a medical record creates a crucial link between the accident and your injuries.
Report the Accident: Call the police to the scene to create an official report. This document is vital evidence for establishing fault.
Gather Evidence: If you are able, take photos of the vehicles, the scene, license plates, and your visible injuries. Collect contact information from the other driver and any witnesses.
Notify Your Insurance Company: Report the accident to your insurer promptly, but be cautious in your statements. Stick to the basic facts without speculating on fault or the severity of your injuries.
Consult with an Attorney: Before providing recorded statements or signing any documents from any insurance company, consult with a qualified Nebraska personal injury lawyer who can protect your rights and guide you through the complex process of pursuing a UIM claim.