If the driver at fault in an accident has insurance but it’s not enough to cover your medical bills or damage to your vehicle, underinsured motorist coverage can step in where the other insurance left off.
The fundamental difference between uninsured and underinsured motorist coverage is that uninsured covers you if you’re hit by a driver with absolutely no insurance, while underinsured covers you if the at-fault driver’s insurance cannot fully pay for your injuries or damage.
Like your liability insurance policy, there are both bodily injury and property damage options for uninsured and underinsured coverage.
While uninsured and underinsured motorist coverages aren’t generally required, it’s a good idea to have both types of insurance. That way you won’t have to worry about paying for damage or medical expenses on your own if you’re in an accident where the at-fault driver doesn’t have any or enough insurance.
According to the Insurance Research Council, roughly 13 percent of motorists are uninsured, making uninsured and underinsured motorist coverages important to help further protect you from potential costs of an accident.
You may be able to “stack” your uninsured and underinsured motorist bodily injury coverage if you have more than one insured vehicle and live in a state that allows stacking. Contact your insurance provider for more details and to find out if stacking is available to you.
Let’s say you have three insured cars in your household and the limit your insurance will pay out for your uninsured or underinsured motorist coverage is $20,000 for each car. You can combine those limits in the event of an accident to increase your stacked limit to $60,000. If you’re hit by an uninsured motorist and your medical bills amount to $55,000, you can combine or “stack” the insurance limits for each car you own to help cover the cost of your medical bills.
When you’re hit by an uninsured driver, the solution is easy—you file a claim with your auto insurance provider against your uninsured motorist policy.
The process can be a bit more confusing when you’re hit by a driver who has insurance, but just not enough. A good rule of thumb is to always report your injury to your insurance company and they can explain how your underinsured motorist coverage would apply.
Still have questions on uninsured or underinsured motorist coverage, or other types of insurance coverage such as comprehensive and collision? Don’t hesitate to reach out to Dairyland® to learn more about how these policies and other auto insurance coverages can benefit you.
Need to add uninsured and underinsured coverage to your policy? Find out how to keep your premiums low.
Now that you’ve learned more about uninsured and underinsured motorist coverage, find out what else you should know about car insurance.
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