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The ILLUSION of Insurance Coverage

When we purchase auto insurance we all have an expectation that we are getting the coverage that we pay for.  Lately, however, insurance companies have discovered yet another way to make certain coverage disappear when we need it the most.

Underinsured motorist coverage is mandatory in Minnesota and is there to protect us if another driver causes us injury and does not have enough coverage to fully compensate us for those injuries.  Uninsured motirst coverage works the same way in the event the other driver has no insurance at all.  

In Minnesota the statute of limitations on contract claims is 6 years, UNLESS the contract says otherwise.  

In the typical auto crash case it takes 2-3 years or more for someone who has been seriously injured to get treated and recover to a point where their future treatment and needs can be evaluated.  

Some insurance companies are now putting abbreviated statues of limitations in their contracts of insurance, sometimes requiring that a lawsuit be filed against them within 2 years of the crash. This means that an injured person might have to file a claim for underinsured motorist benefits long before resolving the case against the at fault driver.  This can create problems for the victim because resolution of the underlying claim against the at fault driver is considered a prerequisite for bringing a UIM claim.  After all, how does anyone know if the at fault driver is really underinsured until that claim is resolved by payment of the policy limits?

Recently a federal court in Minnesota ruled that an employee should have known what was in his employer's auto policy and should have filed suit within 2 years of the date of the crash to get UIM beneits. This, even though the employee (who was driving his employer's car at the time of the crash) had no access to his employer's policy.  The result was NO COVERAGE at all.  

So don't trust your insurance company to do you any favors.  That's why any claim you make does NOT go to your agent (who is in your corner) but to a claims person who owes you no loyalty at all.

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