Underinsured Motorist Coverage Author:    Posted under: Auto InsuranceAuto Insurance Types


In most states, when you are injured in a car accident caused by another motorist you can sue the at-fault driver to collect for damages. If that driver has adequate auto liability coverage, his policy will be the one to pay you for your expenses on the at fault driver’s behalf up to the limit of the liability coverage he has purchased. The economic value of your injury equals your actual pocket expenses including compensation for your pain and sufferings. But imagine if the at fault driver’s insurance does not meet the cost of your injury? Or worse, what if it turns out that the negligent driver has no insurance at all.

It is a good thing to know that there is a solution that your own car insurance policy can provide to solve this problem. This is the uninsured motorists and under-insured motorists’ coverage.

Uninsured Motorist Coverage simply put is a policy dedicated to provide for a driver to receive damages for any injury they receive from an uninsured, at-fault or negligent driver. Having this policy ensures that  in the unfortunate event of a qualifying accident, the insurance company pays the difference between what the uninsured driver can actually pay and what the injured driver would be entitled to as if the uninsured driver had appropriate insurance. Underinsured motorist coverage is often bundled together with uninsured motorist coverage (UM/UIM). Both are designed to cover the difference between the at-fault driver’s maximum pay-out and the actual cost of medical bills incurred by the other driver. Although it differs from each company, UM/UIM coverage usually only covers medical expenses; uninsured motorists property damage (UMPD) coverage me be needed to cover non-medical expenses.

One way is to look at these two coverage as a form of reverse liability in such a way that you would collect some or all of the economic value of your injuries caused by another driver from your own insurance company, its almost as if they were the at fault driver’s insurer. In other words, uninsured and under-insured motorists coverage make up the breach between the other driver’s liability coverage and the amount of liability coverage he would have needed in order to fully pay your claim – depending, of course, to the amount of uninsured or under-insured motorists coverage you buy.

Under-insured motorists are other drivers who have some auto liability coverage but the economic value of your injury exceeds their liability limit.

Uninsured motorists are other drivers who are either unidentified –such as in cases of hit and run; or those who have no liability insurance at all.

Most insurance agencies today highly recommend that drivers who can afford the addition to their monthly premiums should favorably consider uninsured/underinsured motorist coverage. This is because of the fact that there are a substantial number of drivers on the road who are uninsured or underinsured. The additional expense added to the premium is considerably small compared to the amount of uncovered damage an unemployed or underemployed driver can cause in a serious accident with heavy property damage and multiple injuries.

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