Uninsured and Underinsured Auto Insurance Coverage

Posted by Harry Wagner

State officials throughout the nation set mandatory auto insurance laws, but just because carrying liability insurance is a requirement does not mean that everyone obeys the law. National statistics show that about 13.5 percent of all drivers in the United States operate their vehicles without insurance, regardless of the fact that driving without insurance is against the law and punishable by fines, penalties and jail time.

To protect yourself while you are on the roadways, it is in your best interest to purchase coverage that will cover your medical bills just in case the at-fault driver does not have liability insurance. If you are in the process of shopping for insurance or building a more comprehensive policy, read on and learn how uninsured and underinsured auto insurance coverage protects you from people who disobey the law.

How Does Uninsured Motorist and Underinsured Motorist Coverage Work?

When you are involved in an accident with another party and the other party is at fault, the third-party insurance company will pay to treat the injuries you sustained up to the liability limits stated on the at-fault driver’s insurance. If the at-fault driver does not have insurance, your uninsured motorist coverage will kick in and pay out to cover your medical bills so that you can recover. Uninsured motorist coverage limits are based on a per person and a per accident basis, similar to Bodily Injury limits. The only difference is that the coverage limits will pay you when the at-fault driver does not have liability insurance or when the driver does not have high enough limits to pay for all of your medical bills.

How Much Uninsured Motorist Auto Insurance Coverage Can You Purchase?

The amount of uninsured motorist coverage that you can purchase is based on the limits of Bodily Injury coverage that you select. Your uninsured motorist limits do not have to match your Bodily Injury Liability limits, but they cannot exceed these limits. While most states do not require Uninsured Motorist, there are some states that will require drivers to carry very low limits of UM so that everyone in the state is protected. In other states, drivers must sign a rejection form stating that they waive the option to purchase UM protection. Regardless of what the requirements are in your state, it is your best interest to purchase even the minimum limits of Uninsured Motorist coverage so that an accident with an irresponsible driver does not devastate your family.

There is a very high risk of encountering uninsured drivers, and carrying coverage that will protect you in the case of an accident is vital. The best way to build a policy with uninsured motorist is to use an insurance rate comparison tool that gives you access to competitive rates from all of the most respected lenders. Use technology to your advantage, stay informed about your options, and build a policy that protects your assets and your family. While protection is important, you also need to consider your budget so that you make the best decision overall.