Underinsured Motorist Coverage

What is underinsured motorist coverage?

Underinsured motorist coverage helps pay the cost of damages to your car in the event that you are hit by a driver who does not have enough insurance to cover your expenses. This coverage also helps pays for your and your passengers' medical care for injuries related to the accident. Typically, underinsured motorist pays the difference between your coverage limits and the other driver’s coverage limits.

Some states package uninsured and underinsured motorist into a single coverage. This coverage will protect you in the case you are involved in an accident with either an uninsured driver or an underinsured driver.

Who needs underinsured motorist coverage?

Everyone should consider this type of coverage. As much as we would like to be able to trust other people to hold up their civic, and legal, responsibility to keep their car insurance policy up to date, it is too much of a risk to just cross your fingers and hope for the best.

Different states have different safety requirements in place to try and make sure that everyone on the road is driving under a paid-up car insurance policy. These include requiring auto insurance companies to report lapsed policies, requiring that car owners send in their license plates when their auto insurance policy is cancelled, and fines for each day the driver has no policy but retains their license plates. Should a driver get caught driving without a current car insurance policy, their car gets impounded and they are carted off to jail.

The system, however, is imperfect. Taking out this policy, in addition to your other insurance, is highly recommended as is purchasing as much as you can afford.

Underinsured motorist policy myth

Underinsured motorist coverage is NOT meant to replace collision coverage, comprehensive coverage or no-fault insurance policies. Underinsured motorist coverage is meant to help a responsible driver pay for the costs of drivers without sufficient insurance coverage.

How much underinsured motorist coverage do you need?

The average cost of underinsured motorist coverage is about $40 per year for about $100,000 worth of coverage. This will make up the difference in medical costs that your medical insurance and auto insurance policies do not cover.

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