Jackie suffered serious injuries requiring several surgeries and intensive physical therapy to recover and even though she was not at fault for the accident, she got a $650,000 hospital bill.
HOW IT WENT (EVEN MORE) WRONG
Ian's minimum coverage for Jackie's medical bills was quickly exhausted — he was underinsured — so she had no choice but to sue him for reimbursement, incurring legal fees paid in advance, out of her own pocket.
Since Ian didn't have significant assets, he declared bankruptcy, putting Jackie back to square one. Burdened by debt, unable to work and without compensation for lost wages, she too was forced to declare bankruptcy.
REWRITING THE STORY
If Jackie had a personal umbrella with $1MM excess UM/UIM, it would have kicked in after the underinsured motorist on her auto was exhausted to take care of lost wages and medical bills.
- Why UIM? If you're in an accident and the other driver is at fault and has limited coverage, it covers the gap between what their policy pays and your medical expenses. Without it, you are responsible for the difference.
- UIM is insurance for your benefit. It's insurance for you and your passengers. It takes care of bodily injury and ensures your well-being.
Health insurance won't rescue you. It won't cover lost wages, pain and suffering or emotional distress and has limits for essential medical care, like physical therapy. And co-pays add up. If your bills are $650,000 and your health insurance pays 80%, you would be responsible for $130,000.