Two Vehicles, One Uninsured Roommate, and a Shared 50/50 Limit

Teo:

• A permissive user of a covered auto is an insured for liability - but no liability claim exists against him; the other driver is at fault.
• He is an occupant of a covered auto, so he is an insured for UM/UIM, and for medical payments/PIP if the policy carries it. Most PAPs extend UM/UIM to any person occupying a covered auto, not just family members.

Emeka:

• A family member - related by blood and a resident of the household. Residency is a facts-and-circumstances question, not a mailing address: he is a dependent, on the parents' health plan, returns most weekends and every summer, and his dorm is temporary. Expect the carrier to accept residency, but the file should contain the school address, the insurance declarations showing him as a rated driver, and a statement of intent to return.
• He is therefore an insured both as a family member and as an occupant.

Order of recovery: the tortfeasor's 25/50 policy pays first and is the primary source; UIM is excess over it. UM does not apply - the other driver is identified and insured, just inadequately.

Splitting the tortfeasor's money. 25/50 means $25,000 per person and $50,000 per accident for two injured claimants. Two claimants with serious injuries exhaust the $50,000 per-accident limit.

• Teo: $25,000 (his per-person cap)
• Emeka: $25,000
• Total: $50,000; nothing remains for a third claimant.

UIM, per person. Under the standard approach, UIM pays the gap between the claimant's damages and the tortfeasor's payment, capped at the UIM per-person limit.

• Emeka: $132,000 − $25,000 = $107,000 demanded; capped at the $100,000 per-person UIM limit → $100,000. He remains $7,000 short of full compensation.
• Teo: $46,000 − $25,000 = $21,000 → $21,000.
• Total UIM paid: $121,000, well within the $300,000 per-accident UIM limit.

Two variants to check before finalizing:

1. Some states apply a limits-reduction rule - the UIM limit is reduced by the tortfeasor's payment, so Emeka would get $100,000 − $25,000 = $75,000. That is a $25,000 swing and a common exam trap.
2. If the tortfeasor's carrier allocated the $50,000 by agreement rather than pro rata, the split changes and so does each UIM claim.

Do not deduct the $2,500-style deductible on a liability-side UIM claim; UIM deductibles, where they exist, mirror the UM deductible and are usually waived when the tortfeasor is identified.

Stacking. Two vehicles, two UIM limits of 100/300, and no signed waiver. In states that permit stacking, the available limits become 200/600 per accident:

• Emeka's $107,000 shortfall now fits under a $200,000 stacked per-person limit → he collects the full $107,000 instead of $100,000.
• Teo's $21,000 is unaffected.

In states with anti-stacking statutes or policy language expressly prohibiting intra-policy stacking, the answer reverts to $100,000. The absence of a waiver is not dispositive - in some states a waiver is ineffective for UM/UIM anyway. Check the state rule before promising the extra $7,000; it is a small amount that can cost a bad-faith allegation either way.

Why residency matters, even though it looks settled. If Emeka did not qualify as a family member - for example, if he had moved out, taken a lease, filed his own taxes, and stopped returning - then:

• He would still be an occupant of a covered auto and thus a UM/UIM claimant, but
• He would lose status as an insured for the household's other vehicles, and would lose coverage entirely if he were driving a friend's car under the non-owned auto provision.
• The regular use exclusion would then bar coverage if the vehicle he borrowed was available to him on a routine basis.

Residency also drives rating. If the sedan is principally garaged at school and the carrier was never told, the misrepresentation exposure sits on the parents, not on the injured claimants - most states protect innocent third parties from a policy rescission for a misstatement about garaging.