How Underinsured and Uninsured Motorist Coverage Can Help You

Not many people enjoy paying insurance premiums every month, but most motorists know that if something goes wrong, insurance will be there to help them out. And while you might be familiar with the basics of car insurance –– liability coverage, collision coverage, etc. –– you may not know much about underinsured or uninsured motorist coverage.

This article will give you a basic overview of underinsured and uninsured motorist coverage and how it can help you after an accident.

An Overview of Uninsured/Underinsured Motorist Coverage

Uninsured Motorist coverage, sometimes called UM coverage, compensates you for damages to your vehicle or injuries you sustain in an accident caused by an uninsured.

Underinsured Motorist Coverage (UIM), on the other hand, kicks in when the other driver has insufficient insurance that can't be enough to compensate you for the damages they caused. UIM pays the difference between the at-fault driver's insurance coverage and the amount of damages you incur.

For example, let's say you're in a car accident that causes $20,000 in damages, but the driver at fault only has $15,000 in insurance coverage. If you have UIM coverage, your insurer would pay the additional $5000 not covered by the at-fault driver's insurance.

In both cases, your own insurance company will step in and help pay for the damages up to the limit of your policy. The insurer pays for damages to your vehicle, as well as medical expenses and lost wages if you are injured in an accident caused by an uninsured or underinsured driver.

In some states, UM/UIM coverage also extends to hit-and-run accidents, as well as accidents involving drivers who don't have insurance.

What Should You Expect from the Compensation Process?

If an uninsured or underinsured driver hits you, you will first need to file a claim with your own insurance company. Your insurer will then investigate the accident and, if they determine that the other driver is at fault, will pay for the damages up to your policy's limit.

In some states, you may be required to file a police report to make a claim for UM/UIM coverage. If the police can't find the at-fault driver, your insurer may have a difficult time investigating the accident and determining who is responsible.

How Much Does Uninsured/Underinsured Motorist Coverage Cost?

The cost of UM/UIM coverage varies depending on a few factors, including the state you live in and the coverage limit you choose.

In general, the higher the limit of coverage you choose, the higher your premium will be. All in all, choose a limit that gives you enough protection in the event of an accident.

In general, however, UM/UIM coverage is relatively affordable and can be a wise investment given the potential for accidents involving uninsured or underinsured drivers.

If you have any questions about your UM/UIM coverage or need help filing a claim, contact an auto insurance company. They will be happy to help you navigate the process and get the coverage you need.