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Fairbanks Insurance Blog

News & Updates
07 September 2018

Should I Reject Uninsured Motorist Coverage? Only if You’re Crazy

As a commercial lines manager, I speak with contractors all the time about their insurance and how they can manage their everyday risks. Typically, whenever the conversation leads to ways to save money on insurance premiums, I’m usually asked if uninsured motorist coverage is important on a commercial auto policy.

I certainly don’t think the person who’s asking the question is crazy, only if they forego such an important coverage to save a few bucks each month on their insurance. That, in my opinion, is crazy and here’s why: PAIN AND SUFFERING!

What does Uninsured/underinsured Motorist Cover?

Uninsured/underinsured motorist coverage is designed to protect the insured drivers and passengers who are injured by an at-fault driver who either is uninsured or underinsured at the time of the accident.

For example, one of your employees is using a company owned vehicle to pick up some lumber for a construction job your company is working on. While returning to the job site, another vehicle rams your company vehicle in an intersection and your employee (insured driver) suffers serious injuries.

You soon find out from law enforcement that the at-fault driver was not carrying bodily injury liability coverage and does not have the resources to pay for your employee’s injuries and lost wages as a result of the accident.

You are then told by your insurance broker that it’s not a big deal because since the accident was work-related, your workers’ compensation policy will respond and take care of your employee’s medical expenses and lost wages.

What about the Pain and Suffering?

Although workers’ compensation insurance does cover your employees for work-related injuries and illnesses, it does not cover pain and suffering that can result from the injury or illness.

You now have two choices, your employee can sue the at-fault driver for a pain and suffering reward OR you can file a claim against your commercial auto insurance company under your uninsured/underinsured motorist coverage. You will discover that any injury claim payment from your auto insurance company will likely be offset by your workers’ compensation coverage except for pain and suffering.

According to AllLaw.com, injured employees will not receive benefits for pain and suffering due to a work-related injury.

Workers’ compensation laws do not provide for additional benefits for pain and suffering. They are basically income protection laws. An injured employee receives benefits due to an inability to work. If pain prevents the employee from returning to work, then he/she will receive weekly compensation, but will not receive additional compensation for pain and suffering like in a personal injury case.”

And, your employee cannot legally sue you for their pain and suffering because you were carrying workers’ compensation at the time of the job-related accident.

Why take that Chance?

So then, knowing that an ACCIDENT caused by an uninsured or underinsured driver could leave you and your employee with a financial nightmare, it makes much more sense to cough up some extra money each month for Uninsured Motorist coverage. You’re crazy to take that chance.