Say your car got hit by another driver and when you pursue repayment charges with the third party, you find out that the third party does not have any insurance. So will you be covered? Yes, you can be with underinsured/uninsured motorist coverage. Underinsure/uninsured motorist coverage will provide protection for your car if it needs repair from an accident that involves an uninsured/underinsured motorist.
What is uninsured/underinsured motorist coverage?
This is a coverage that will take care of the cost of treating injuries caused to you and your passengers in case you were involved with an accident with a driver who does not have insurance. In some states, UM or UIM also covers property. You must know that an uninsured/underinsured motorist is one who fulfills the following conditions:
- Does not have insurance
- Has insurance but that which does not suffice the state minimum liability requirements. You can find out about auto insurance state laws from .
- The insurance company has denied claim for insurance or the individual has not been able to pay his premiums regularly.
- Is a hit-and-run driver.
On the other hand an underinsured driver is one who has insurance that meets the state minimum requirements but have payment limits not high enough to pay for the damage incurred. Although these policies can be purchased together and are usually sold together also, these are available separately too.
Do you need UM and UIM coverage?
Uninsured/underinsured motorist coverage is not mandatory in most states. Only a handful of states require you to have it and for the rest, it is optional. So if you do purchase uninsured/underinsured motorist coverage, the payment limits must meet the state minimum requirement and cannot exceed the liability limit.
You will need this insurance in case you get in to an accident with a driver who is not insured or who has insurance, but cannot afford to pay the full cost of repairing the damage. Car repairing can be expensive and if you have to do it without proper coverage, it will be very taxing on your pocket. Considering the number of benefits it offers, you may purchase this insurance. It offers additional benefits like:
You will need this insurance in case you get in to an accident with a driver who is not insured or who has insurance, but cannot afford to pay the full cost of repairing the damage. Car repairing can be expensive and if you have to do it without proper coverage, it will be very taxing on your pocket. Considering the number of benefits it offers, you may purchase this insurance. It offers additional benefits like:
- Paying for your medical bills.
- Compensating lost wages.
- Compensating financially for pain and suffering.
In a struggling economy, you could benefit from UM and UIM coverage when the other party cannot provide full compensation for your damages. UM/UIM is also not an expensive thing to add to your policy, so you might as well consider it.
UIM pays only up to the limit of your policy minus the amount paid by the other driver at fault. This coverage is meant both for you and the passengers in your car as well as to the other members listed in your policy when using someone else's car. Many of you may think that if you have collision coverage, you don't need UM or UIM coverage. But the fact is, this is a good choice for careful drivers who have not purchased collision coverage. This as an alternative is cheaper and hence attractive too.
UIM pays only up to the limit of your policy minus the amount paid by the other driver at fault. This coverage is meant both for you and the passengers in your car as well as to the other members listed in your policy when using someone else's car. Many of you may think that if you have collision coverage, you don't need UM or UIM coverage. But the fact is, this is a good choice for careful drivers who have not purchased collision coverage. This as an alternative is cheaper and hence attractive too.
How are UM and UIM categorized?
Uninsured/underinsured motorist coverage is divided in to 3 broad parts:
- Uninsured motorist property damage insurance: This is normally meant for those individuals who have not purchased collision coverage. Since this is not expensive you do not even have to pay a huge premium for this. However, this uninsured motorist property damage does not provide coverage in a hit-and-run case.
- Underinsured motorist protection: This coverage pays for damages beyond the amount of coverage owned by the driver at-fault. You will receive an amount minus what the at-fault driver pays and not the full amount of the difference.
- Uninsured motorist bodily injury protection: provides protection for you (insured) and any passenger in your car if they too have sustained bodily injury/injuries. As an insured, you can get coverage for bodily injury even if you get hit as a pedestrian crossing the street. Lost wages, medical bills, hospital bills are also paid. It also provides protection for your family members if they are injured while traveling in another vehicle.
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