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Underinsured Motorist Coverage

Underinsured Coverage

Why You Need an Underinsured Motorist Coverage

If you think that no car owner drives without a motor insurance so you do not need underinsured motorist coverage, then you would be making a big mistake. You need to protect yourself from financial and emotional losses that could arise from a vehicular accident where the other party has inadequate, or worse, no insurance. You could save yourself and your family a lot of troubles and heartaches, if you get coverage for underinsured or uninsured motorists.

About half of all vehicular accidents in the U.S. have one uninsured or underinsured motorist. So this is something you really cannot afford to ignore. Most insurers offer this coverage automatically at a minimum of $30,000 per person and $60,000 aggregate. And most motorists opt out of the coverage, a decision they usually regret later on. With the going minimum liability limits not being adequate to cover losses anymore and the rapid increase of the cost of automobiles and their parts, it is sensible to have uninsured or underinsured motorist coverage and to set it at higher limits.

If you rarely take passengers for a ride in your car and you are in tip top shape plus you have a very adequate health insurance that covers injuries sustained in an accident then why do you need uninsured and underinsured motorist coverage? It would look as though you might have double or even triple coverage if you live in a state that has the mandatory Personal Injury Plan.

The answer to this would be that uninsured or underinsured motorist insurance provides coverage that a plain health plan does not cover. For instance, it pays benefits for lost earnings if the accident causes the insured injury that would take him away from his work for a period of time. This is not covered by health insurance. Then there are benefits for pain, suffering, and emotional distress, which you should be rightfully compensated under the law. The health plan does not cover this type of loss. Another type of loss not covered by health insurance is your need to hire a private nurse or to hire household help during the time you are incapacitated to perform your normal duties. All these losses are covered by uninsured or underinsured motorist coverage.

The Uninsured Clause in Your Auto Insurance

If you opt to have an uninsured or underinsured coverage, you should know who you are being protected against. The uninsured motorist clause in your policy will be triggered if the other party who is at fault in an accident you were involved in has no liability insurance for the car they are driving. Most U.S. states consider it a crime for vehicle owners to have no liability insurance. The clause will also be triggered if the other party at fault does a hit-and-run on you. If a driver leaves the accident site without giving information on their identity and insurer, the driver left behind is deemed uninsured under the uninsured or underinsured motorist clause. If you are able to get the license plate of the fleeing driver, then insurance companies will view this as adequate information to pursue a claim. In this situation, the registered owner of the run-away vehicle may not be the one involved in the accident where you sustained damage to your car and injuries to yourself. If they try to deny involvement your insurer can begin litigation.

The third instance when the uninsured or underinsured motorist coverage provision in your auto insurance would be triggered is when the liability coverage of the “at fault” driver is not sufficient to cover the limits of your uninsured or underinsured motorist’s policy. This is when the underinsured provision of your uninsured and underinsured coverage would kick in to cover the difference between the other party’s liability and your uninsured or underinsured motorist coverage if there is any.

The uninsured or underinsured coverage pays for your medical expenses, lost earnings, and any other expenses related to the injury you sustained during the accident, provided that the uninsured or underinsured party is found to be at fault. Should your uninsured or underinsured policy match the liability coverage of the party at fault, then you need not file a claim with your insurer as the other party’s insurer will cover your costs.