Uncovering the Truth About UM/UIM Insurance

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What do the rich know that you don’t? Are you really covered?

Biker Rebellion Podcast, Episode 2

Time to break the silence about a secret of The Rich and why they always carry a specific type of insurance and dive deep into the Hidden Truth: Uncovering Insurance Companies’ Secrets About UM/UIM Insurance.

Welcome to the Rebellion. We’re cutting through the BS and legal lingo to get straight to what you need to know BEFORE you need to know it.

The Biker Rebellion is a new Podcast-style video series where we answer the legal questions that every motorist should know. Speaking truth to power by saying things that other law firms won’t!

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Feel free to hit play to watch Episode 2, or follow along with the transcript below.

Biker Rebellion Podcast Episode 2 (Transcript)

Ginger Jansen: Do you know if your insurance is paying you fairly? let’s find out. Welcome to the Rebellion. I’m your host Ginger here with the founding member of the Biker Lawyers, Pete Leehey. Pete, you’ve been a lawyer for, God, almost four decades now, is it?

Pete Leehey: Yep. Coming up on 38 years. If you wanna be precise about it.

Ginger: And you’ve been, in personal injury for most of that time, if not all of it, right?

Pete: All of it in varying degrees.

Ginger: And in all that time, would you say that insurance companies pay out fairly or do you think that, uh, not so much.

Pete:  Fairly rhymes with rarely.

Ginger: Truly. What can you do when you’ve been injured the other side’s insurance just isn’t gonna pay you out. Only offers to pay you a small amount.

Do you, do you settle for the scraps? What do you do?

Pete:  You basically have two choices. Choice number one is tuck your tail between the legs, take the crumbs and walk away from it. Choice number two is hire a lawyer and go to battle with them.

Ginger: We’ve talked about this before, but I think it bears repeating.

How does insurance factor into these cases? Are you able to sue them? And if not, how do they play in these cases?

Pete:  In almost every case, you can’t name the insurance company directly. So most cases that go to trial, it might be against John Brown, but behind John Brown stands the insurance company.

Ginger: Sure.

Pete:  You just can’t name them. You can’t talk about insurance at the trial. Basically, what the jury hears is the case is against John Brown, except in extremely rare circumstances.

Ginger: So, we’ve not really covered this, but, you do get to name insurance companies if they’re underinsured or uninsured carriers for your policy, correct?

Pete:  Correct. That’s the exception. So the two scenarios, one of ’em is John Brown has $20,000 of insurance, but you’ve got, say, $500,000 in medical bills. So John Brown’s $20,000 isn’t enough, and hopefully you’ve got a good underinsured motorist policy. And in that case, you get to directly name your own insurance company in the lawsuit.

Same thing with an uninsured, maybe John Brown that caused the crash. Doesn’t have any insurance at all, which is true for one out of 10 drivers, believe it or not. But if somebody has no insurance at all, then it’s just a direct action against your own insurance company for uninsured motorist benefits.

Ginger:  And that’s only if you manage to buy that policy ahead of time.

Pete:  Exactly.

Ginger:  And that’s a policy that insurance companies don’t often. sell you. They don’t often even mention, from what I understand, at least from personal experience, I don’t think I ever had an insurance agent tell me “You need underinsured or uninsured motorist coverage”.

Pete:  Let me put it this way. I just helped walk through somebody that was buying insurance online recently, and the first thing it asks is, “How much coverage do you want?” And it says, “We recommend $20,000.” I’m thinking Bullshit! So we get the right amount of coverage for liability. Then it moves into uninsured, underinsured, and it says,

“Do you want uninsured, underinsured? We recommend, no.”

It’s unbelievable. And I’m not saying it’s that way in every case, but this was a major insurance company that sells policies nationwide and, and this is what they’re prompting people in their online forms.

Ginger:  To clarify here, if you don’t have underinsured, uninsured motorist coverage, how does that open you up to, uh, not being able to recover?

In the case of, let’s say you, you know, you get into a serious collision, you’ve got a hundred thousand in medical bills, you’ve had major surgeries. The person on the other end, let’s say they have 20-40. uh, limits, you know, $20,000 to $40,000 per incident. Right. And that’s the state minimum in Iowa if I remember correctly.

Pete:  Correct. And, so $20,000 per person is what that is, and $40,000 per crash. So, for example, if you got a passenger, there’ll be up to $20,000 for each of you and a max of $40,000 for the whole crash, which in the scenario you just described, which is really quite common, you’re screwed unless you have underinsured motorist coverage.

Ginger:  So how does, how does that come into play in this instance? Let’s say, you know, you get into this scenario and it’s 20,000 is what you can get. It’s, you know, you’re by yourself. There’s no other passenger. So it’s just you major surgeries, 20 thousands on the table and the insurance company is coughing it up- policy limits immediately. Does. Where does UIM now factor in?

Pete:  So to properly bring an underinsured motorist claim, there are some legal hoops that have to be jumped through, and those hoops are defined in your insurance policy. The typical situation is you can’t just take that 20,000 and call it good and then sue your own insurance company for underinsured motorist benefits.

You have to show them that the person, “John Brown,” that hit you, that has 20,000 in coverage, you have to show him that that’s all you realistically can get from him. So, for example, the 20,000 insurance coverage, yeah, that’s the most you’re gonna get from Insurance, but now we gotta make sure that John Brown doesn’t have assets that might be able to cover a trial verdict, because if he does, and you take the 20,000 without consulting with your own insurance company and showing them John Brown’s assets, you’re gonna get shut out on your underinsured motorist benefits as well.

Ginger:  So, let’s talk a little bit more about the assets, because I know it’s a common misconception that when we are, uh, suing somebody that we’re going after their personal assets and not the insurance policy necessarily. And that’s definitely the way that I, I feel like the trials have been structured to make the jury believe that because you’re not allowed to talk about the insurance, uh, company, typically in trial from what I understand.

Pete:  Correct.

Ginger:  So are we going after assets? At what point do you go after assets?

Pete:  It’s extremely rare that you have a case where it makes sense to try to go after the assets of John Brown, because typically, let’s just go back to the, John has bought a minimum insurance policy of $20,000 per person. That’s a pretty good indication that John Brown doesn’t have a lot of assets to protect, because if he does, he’s gonna be thinking about it.

You’d like to think, and my experience has shown me this to be. Almost a hundred percent of the time, true. If John Brown has assets to protect, he’s gonna have a bigger policy than $20,000. So almost always, when you’ve got somebody with a $20,000 policy, and the way that you prove that they don’t have additional assets that can be satisfied for a judgment is you require them to fill out a financial statement to disclose all their assets and income as well as liabilities, and then you show that to your insurance company.

I mean, we’re literally talking hundreds, if not thousands of cases that I’ve seen over the years that I’ve been doing this. It almost never happens that somebody who has significant assets doesn’t have a big insurance policy.

Ginger:  So as a general rule, if you’ve got wealth, you’re gonna protect it. Insurance policies tend to be able to do that nicely, as long as you have the money to do so.

Pete:  The, the only scenario really where personal injury attorney is advocating, let’s go after assets, is where there is substantial assets on the other side, but they for some reason decided not to protect it with a proper insurance policy. Again, that’s super rare because people who have substantial assets typically are smart enough to know that if they get into a situation where they cause a serious injury to somebody, their assets are at risk.

So they almost always are gonna. A substantial insurance policy to protect those assets. However, in the extremely rare case where somebody doesn’t have enough insurance to protect themselves, in the case of a, a serious crash, you can go after their assets if they have things that they can’t protect in bankruptcy.

Ginger:  And to clarify some of the things that get protected in bankruptcy, I, I believe there’s a homestead exempt.

Pete:  Yeah, there’s all kinds of stuff. Some of it is really logical, some of it, uh, doesn’t make a lot of sense. But the bottom line is there are things that are protected in bankruptcy, including your house, a vehicle, tools of the trade.

Um, a, a big one is retirement accounts. You, you can’t put your hands on those. What you’re looking for is a situation where somebody has assets that they cannot protect in bankruptcy that you can legitimately go after. And again, as I sit here right now, I can think of one case I’ve seen like that in 38 years.

Ginger:  Okay. And, and to clarify, uh, some of those exemptions in, in case the viewers are wondering, I believe it includes a musket…

Pete:  That’s why I said somethings are kinda goofy…

Ginger:  But I, I remember a few weird ones being in there and laughing pretty heavily at how outdated some of the terminology was. If you need to protect your assets, you can buy a very nice Musket.

Pete:  Exactly.

Ginger:  So, I think it’s worth clarifying- Practically speaking, we’re not really going after defendants after a crash. We’re, we’re just going after insurance policies.

Pete:  That’s almost 100% true.

Ginger:  Okay. And does, does the defendants, uh, get to choose their own attorney to defend their insurance policy?

Pete:  The typical answer is no.

Ginger:  So how do they get an attorney?

Pete:  When John Brown gets sued, John Brown contacts his insurance company. His insurance company has a list of insurance defense lawyers that they use When their policyholders get sued, they pick the lawyer to defend John Brown and, and really themselves.

Ginger:  And does the defendant have to pay for this attorney?

Pete:  I’ve never seen a policy where somebody that gets sued in a crash has to pay for the lawyer. It’s the insurance company that’s footing the bill.

Ginger:  Which I suppose in a way, you’ve paid for it already because you’ve been paying on that insurance policy for however long it’s been in effect.

Pete:  Yeah. It’s in essence a prepaid insurance policy to cover the cost of a lawyer if you end up getting sued for crashing into someone.

Ginger:  So are there downsides as a defendant, let’s say, you know, you’re, you’re negligent, you’re on your phone and you accidentally hit somebody. And so the insurance company, they, they send you an attorney to defend.

Uh, you ostensibly, but more importantly, it seems like they’re defending the insurance policy a little bit more heavily.

Are there any downsides, uh, for John Brown as a defendant in the scenario to not being able to choose their attorney and having that scenario?

Pete:  Well, you hit the nail on the head there.

The insurance company’s obligation is to defend the case. But really what they’re doing is defending up to their policy limits. So if it’s a case that has the amount of damages are larger than the policy limits, then John Brown really doesn’t have protection for his personal assets if he has ’em beyond the amount of the insurance policy.

And when that does come up, I don’t know what insurance defense lawyers do, but I know what they’re supposed to do, And that is they tell John Brown, “Hey, you’ve got coverage for $20,000, but there’s excess liability exposure and you need to have your personal lawyer giving you some advice as this thing moves into negotiations.”

Ginger:  So when we get to the legal strategy, John Brown, does he get much of a say in the legal strategy for his defense?

Pete:  No. No. The case is controlled by the insurance company. The insurance company’s making the decisions. Some of them are more responsive than others. Again, I don’t have much experience or knowledge about this, but, but some of them are, are better than others as far as keeping the insured informed, but the overwhelming way that it works- by far- is the insurance company makes the decisions. They tell their lawyer what to do, the lawyer reports to the insurance company, and that’s how the decisions get made.

Ginger:  So does John Brown get much say in whether something settles, doesn’t settle, and how much money is being offered to the plaintiff? Any of that?

Pete:  We’re talking about standard. Collisions involving cars, motorcycles, and trucks, and the universal rule is almost always no. John Brown doesn’t have a say. The insurance company decides. So

Ginger:  Whether it’s your fault, or somebody else’s fault, a crash occurs. What do you think is the overarching message that people need to hear when it comes to those crashes and insurance companies?

Pete:  If you’re the guy getting sued, you just need to realize that the insurance company is out there protecting themselves and not necessarily you. And again, that’s why people in that situation sometimes are wise to at least. Personal lawyer that they consult over the thing, but the insurance company’s out there for themselves.

Ginger:  I’ll leave one final note for our viewers. Don’t you think it’s strange that an insurance company has to spend billions of dollars annually to inform you that they’ll help you when you need them? Until next time, speak Truth to Power.

Brought to you by the biker lawyers.