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<br />The UM/VIM coverages are intended to assure that an injured driver will be compensated if slhe <br />is injured in an accident caused by an uninsured or underinsured driver. The UM/UIM coverage <br />steps into the place of the liability insurance that the driver should have had. <br /> <br />Keep in mind that in the case of city vehicles. an injury to the driver while operating a city <br />vehicle would in most cases be covered by workers' compensation. The amounts the individual <br />would be able to recover from UMfUlM would be in addition to the medical, indemnity. and <br />other benefits paid under work compo In many cases. it would amount to a double recovery for <br />the individual's injuries. <br /> <br />A city might decide to carry a higher limit for a couple reasons: if they believe the workers' <br />compensation benefits are insufficient to compensate their injured employees; or if they want to <br />make sure that non-employees riding in city vehicles are fully compensated in the event of an <br />accident with an uninsured or underinsured vehicle. (Note that in lllost cases the passenger's <br />own UM/VIM would also respond.) <br /> <br />Ll\ICIT now gives the cities who participate in tbe primary liability coverage the option to <br />waive the $300,000 per claimant statutory liability limit. What's the effect if we do this? <br /> <br />If the city chooses the "waiver" option, the city and LMCIT no longer can use the statutory limit <br />of $300.000 per claimant as a defense. Because the waiver increases the exposure, the premium <br />is roughly 3% higher for coverage under the waiver option. <br /> <br />If the city waives the statutory limit. an individual claimant could therefor recover up to <br />$1,000,000 in damages on a claim. Of course, the individual would still have to prove to the <br />court or jury that slhe really does have that amount of damages. Also, the statutory limit of <br />$1.000,000 per occurrence would still apply: that would limit the individual's recovery to a <br />lesser amount if there were multiple claimants. <br /> <br />Why would the city choose to pay more in order to gct the waivcr-option coycragc? Docs it <br />give the city better protection'! <br /> <br />No. Buying coverage under the "waiver" option doesn't protect the city any better. The benefit <br />is to the injured party. <br /> <br />The statutory liability limit only comes into play in a case where <br /> <br />I. the city is in fact liable~ and <br /> <br />2. the injured party's actual proven damages are greater than the statutory limit. <br /> <br />Very literally. applying the statutory liability limit means that an injured party won't be fully <br />compensated for hislher actual, proven damages that were caused by city negligence. Some <br />cities as a matter of public policy may want to have more assets available to compensate their <br /> <br />4 <br />