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• <br />• <br />SEP-25-2003 16 28 ACORDIR <br />1 <br />9528307355 P.06 <br />The L-~rilCTIM coverages are intended to assure that as injured driver will be compensated if s/he <br />is injured in an accident caused by an uninsured or tmderinsured driver. The LlArilUIl1+I coverage <br />steps into the piece of the liability insurance that the driver should have had. <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 CIA~i/I1IM would be in addition to the medical, indemnity, and <br />other benefits paid under work comp. In many cases, it would amount to a double recovery for <br />the individual's injuries. <br />A city might decide to carry a higher Iimit for a couple reasons: if they believe the workers' <br />compensation lenefits are insufficient to compensate their injured employees; or if they want to <br />' make slue that non-employees riding in city vehicles are fully compensated in the event of an <br />accident with an uninsured ox underinsured vehicle. {Nate that iu most cases the passenger's <br />own UNUUIM would also respond.) <br />L:ViCIT now gives the calties who participate in the primary liability coverage the option to <br />waive the 5300,000 per claimant ststntory Hability linotit; What's the et~ect if we do this.' <br />If the city chooses the "waiver" option, the city and LMCIT no longer can use the statutory Iimit <br />of $300,OQ0 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 />If the. city waives the statutory limit, as individual claimant could therefor recover up m <br />S 1,004,000 in damages on a claim. Of course, the individual would still have to prove to the <br />wart or jury that s/he really does have that amount of damages. Also, the statutory limit of <br />$1,000,000 per accun~ence would still apply; that would Iimit the individual's recovery to a <br />lesser amount if there were multiple claimants. <br />Why would the city choose to pay more io order to gtt the waiver-option coverage? Does it <br />give the city better protection? <br />No. Buying coverage under the "waiver" option doesn't protect the city any better. 'fhe benefit <br />is to the injttred;patty. <br />The statuwry liability limit only comes into play in a case where <br />i) the city i~ in fact liable; and <br />2} the injured patty's actual proven damages are greater than the statutory limit. <br />very literally, aFP1Y~8 the ~m~'Y liability limit mesas that as injured Party won't be fully <br />compensated for lus/her actual, proves damages that were caused by city negligence. Some <br />cities as a matter of public policy may want to have more assets available co compensate their <br />citizens for injuries caused by the city's negligence. Waiving the statutory liability limits is a <br />way to do that. <br />4 <br />