Purchasing the right insurance can be a complicated endeavor, even for an experienced attorney or insurance agent. In fact, what you’re really buying is peace of mind. We want to make sure we have insurance that meets legal requirements where we live, and also provides the protection needed for ourselves and our families. What kind of insurance you purchase can make all the difference in making sure you’re adequately covered if you’re involved in a motor vehicle wreck.

What is Underinsured Automobile Insurance Coverage?

Most people are aware of the basic automobile liability insurance that’t required to drive on the roads of the state. However, what many may not be aware of is the Uninsured/under-insured (UM/UIM) that is available for purchase on all policies and what it’s for. The concept and coverage is basic in that under-insured coverage provides additional monies on your own insurance policy in the event that you’re injured by another driver that does not have enough to fully compensate you for the injuries you may sustain.  Uninsured coverage applies for a situation where you’re hit by a driver with no insurance at all. It’s important to remember that these types of insurance are a separate part of coverage under your policy, typically for an additional premium. The good news is, for the most part, the premiums on these types of coverage are rather inexpensive. They buy peace of mind for you, in that you know you have insurance that can help cover your damages and injuries, if the other driver does not.

Examples of Uninsured/under-insured (UM/UIM)

A good example of when UM/UIM has come into play, is the driver who has minimal limits of insurance ($25,000.00 in many states) or no insurance at all. For example, if a driver hits you and causes significant bodily injuries (such as a broken leg and back fracture) but the driver only minimal policy limits ($25,000.00) and your damages/bills for your injuries totaled $100,000.00, there is a shortfall of $75,000.00.  If you had under-insured (UIM) coverage, those monies would cover that shortfall. In a worst case scenario, if the driver is uninsured and you have no uninsured (UM) coverage there would be no monies available to handle your bodily injuries from the wreck at all. Unfortunately, these scenarios are all too common.

State Requirements for Underinsured Automobile Insurance Coverage

Most states require that UM/UIM is offered on policies sold, but such coverage is not required. That being the case, you will need to discuss coverage options with your insurance agent or insurance carrier to see what is available and what it will cost in additional premium beyond your legally required liability coverage. A good rule of thumb is to purchase an amount you can reasonably afford. This will make sure you have the necessary coverage available in a crisis that always comes after an accident.

Since these insurance questions can be complicated, my colleagues and I at Wettermark Keith are always available to answer any questions you may have about UM/UIM coverage.