What is uninsured/underinsured coverage?
In case of an accident caused by a driver without insurance, an Underinsured Motorist policy replaces the liability coverage that a driver should have had and gives you coverage for all of your costs, up to your policy’s limits. If an underinsured driver is responsible, a UIM policy fills the gap between what the at-fault driver’s insurance will pay and the total cost of the accident, up to the policy’s limits.
Uninsured and underinsured motorist coverage can be purchased to cover bodily injuries, and in some states it’s also available to cover property damage.
Here’s one way to look at it, instead of buying insurance to protect other drivers from damage you cause, you’re buying insurance to protect yourself from damage caused by other drivers.
Uninsured/underinsured bodily injury insurance covers medical expenses, pain and suffering, loss of income and funeral costs for you and all passengers in your car. You also get the same bodily injury coverage after a hit-and-run accident.
Property damage coverage will pay for auto repairs, and it can also pay for damage to other property like a fence that has been run over by an uninsured driver. Some uninsured/underinsured property damage policies will come with a deductible that you would be responsible for before your coverage begins.
What Does Underinsured Motorist Insurance Cover?
Even though a driver may have the minimum amount of liability insurance to be legal in their state, their coverage may not be enough to cover your damages and injuries that result from an accident they caused. That’s why you’ll want underinsured motorist coverage.
Underinsured motorist bodily liability coverage protects you financially if you’re in an accident with an at-fault driver who has some auto insurance, but their limits aren’t high enough to cover your full expenses after a claim. It includes coverage for the insured members of your household, as well as the passengers in your vehicle.
So let’s say you get into an accident caused by an underinsured driver. Their insurance will pay for injuries up to their policy limit, and your underinsured motorist coverage will step in and cover the remaining amount up to your policy limits. If you don’t have this coverage, you could be left paying out-of-pocket for some of the medical expenses even though it wasn’t your fault!
Underinsured motorist bodily injury coverage can help with the following:
- Medical expenses for injuries that resulted due to the accident
- Loss of income
- Funeral costs
- The costs of treating emotional and mental issues that result from an accident
What Does Uninsured Motorist Insurance Cover?
Uninsured motorist coverage provides similar protection as underinsured motorist coverage, but in this case, you’re protected from drivers who have zero car insurance. Not only is that driver cruising around illegally, but it also means that they probably won’t be paying you for damages and injuries sustained during the accident.
Having uninsured motorist bodily liability coverage helps you avoid a situation where you’re left paying a big chunk of money for an accident you didn’t cause. It’ll financially protect you, the insured members of your household and the passengers in your vehicle. This coverage even protects you for injuries sustained from hit-and-run accidents.
Uninsured motorist bodily injury coverage helps cover:
- Medical expenses for injuries that resulted due to the accident
- Loss of income
- Funeral costs
- The costs of treating emotional and mental issues that result from an accident
Do I Need Underinsured or Uninsured Motorist Coverage?
So do you actually need underinsured or uninsured motorist coverage? It depends. Some states require one or both of the coverages, while other states offer them as optional coverage. Either way, the peace of mind this coverage provides is worth having.
Underinsured and uninsured motorist coverage are an important piece of any insurance package. If you want to proactively plan for the unexpected, your agent can help you better understand what coverage is offered or required in your state.