Uninsured and Underinsured Coverage

Uninsured and Underinsured motorist coverage is required to be provided in automobile insurance policies according to the Texas Insurance Code, Section 1952.101(b).  However, this coverage can be rejected as long as the rejection is in writing, according to 1952.101(c).  This coverage is designed to compensate injured persons who are legally entitled to recover damages from persons who cause motor vehicle accidents who do not have coverage or do not have adequate coverage.

The auto policy insuring agreement provides that the carrier will pay damages “which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, caused by an accident.”  This coverage applies if the person causing the accident is either uninsured or underinsured.  Thus, legal liability or negligence must exist on the part of the uninsured or underinsured motorist in order to trigger this coverage.  The auto policy goes on to say that the owner’s or operator’s liability for these damages must arise out of the “ownership, maintenance or use” of the uninsured motor vehicle.

The 2004, Texas Supreme Court opinion, Old American County Mutual Fire Insurance Company v. Sanchez, says uninsured motorist coverage essentially enables a victim of a motor vehicle accident to recover from his or her insurer the amount, up to policy limits, the victim would have been able to collect from the person who caused the accident had that person been insured.”

The coverage requires the insured to show the uninsured driver would be liable to him or her for his or her damages.  In the 1996, Houston Court of Appeals [1st Dist.] opinion, Valentine v. Safeco Insurance Company, the insured was not allowed to recover from her uninsured motorist carrier for the negligence of her employer because the employer could not be legally liable, the worker’s compensation bar prohibited any legal liability on the part of the employer to the insured.