Unless you or your spouse rejected it in writing, you have uninsured/underinsured motorist coverage as part of your Texas Auto Policy. That coverage is designed to protect you in the event you are injured by a person who has no insurance (uninsured) or not enough insurance (underinsured) to compensate you for your injuries. Because insurance agents seldom explain the advantages of this coverage, you may only have $20,000 worth of UM/UIM protection.
Likewise, unless you or your spouse rejected it in writing, you also have personal injury protection coverage (PIP) which pays you for medical expenses and/or a percentage of your lost wages, up to the limits of the policy. PIP is usually offered in the amount of $2,500 (although you can and should get more for only a few additional dollars per year).
Let's say you have severe injuries and you settled your PIP for $2,500 and then begin negotiating with your insurance company to settle the UM/UIM claim. The insurance company may tell you that they are going to take a PIP offset from the UM/UIM claim. They may offer you $17,500, instead of the $20,000 you deserve. They may tell you they are allowed to do this according to the terms of your insurance policy. And, in fact, practically every Texas Personal Insurance Policy contains a provision similar to this:
"In order to avoid insurance benefits payments in excess of actual damages sustained, subject only to the limits set out in the Declarations and other applicable provisions of this coverage, we will pay all covered damages not paid or payable under any worker's compensation law, disability benefits law, any similar law, auto medical expense coverage or Personal Injury Protection Coverage."
The insurance company may try to convince you this clause means they get a deduction for the PIP money they have paid. If you believe them, they may have hoodwinked you. In 1982, the Texas Supreme Court decided Dabney v. Home Ins. Co. In that case, the Home Insurance Company tried to take a PIP offset from the UM coverage. The insurance company cited the language of the insurance policy to justify its action. The Supreme Court said that the policy language could not get around the statute passed by the Texas Legislature that mandated UM coverage in Texas. In other words, the state law controlled over the insurance company's policy language. So, no PIP offset.
Unfortunately, this has not stopped all insurance companies from trying to do this to their insureds. And, since the average citizen has never heard of the Supreme Court's decision in Dabney v. Home Ins. Co., they may not question their own insurance company.
If you were (1) the owner or operator of the car with $20,000 of UM/UIM coverage, (2) you make a UM/UIM claim on your insurance company, and (3) they try to pull this stunt, see a lawyer immediately. Only when enough people strike back will insurance companies stop trying this.
Written by Donald Ray Burger, Attorney at Law
Last revised: January 23, 1997
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