Uninsured/Underinsured motorist coverage is an important type of auto insurance coverage that can protect you if you are in an accident with a driver who doesn’t have insurance or doesn’t have enough insurance to cover the damages. In this article, we’ll explain what uninsured/underinsured motorist coverage is and why you might need it.
What is Uninsured/Underinsured Motorist Coverage?
Uninsured/underinsured motorist coverage is an optional type of auto insurance coverage that pays for damages and injuries that you or your passengers may sustain in an accident caused by an uninsured or underinsured driver. This can include medical expenses, lost wages, and other damages.
Why Do You Need Uninsured/Underinsured Motorist Coverage?
Even though auto insurance is required by law in most states, there are still many drivers who don’t carry insurance or don’t carry enough insurance to cover the damages in the event of an accident. If you’re in an accident with an uninsured or underinsured driver and you don’t have uninsured/underinsured motorist coverage, you may be responsible for paying for the damages out of pocket.
Additionally, even if the other driver has insurance, their policy limits may not be enough to cover the damages. In this case, uninsured/underinsured motorist coverage can help cover the gap and protect you from financial liability.
How Does Uninsured/Underinsured Motorist Coverage Work?
If you’re in an accident with an uninsured or underinsured driver and you have uninsured/underinsured motorist coverage, your insurance company will pay for damages and injuries that you or your passengers may sustain up to the policy limits.
It’s important to note that uninsured/underinsured motorist coverage is not required by law in all states, but it’s a good idea to consider adding it to your auto insurance policy for added protection.
How Much Uninsured/Underinsured Motorist Coverage Should You Have?
The amount of uninsured/underinsured motorist coverage you need depends on several factors, including your state’s minimum requirements, your personal assets, and your risk tolerance.
Most states have minimum requirements for uninsured/underinsured motorist coverage, but these minimums may not be enough to cover the full extent of damages in the event of an accident. For example, if you live in a state where the minimum uninsured/underinsured motorist coverage is $25,000 per person and $50,000 per accident, but you have $100,000 in medical expenses and lost wages as a result of an accident, you could be left with a significant financial burden.
It’s a good idea to consider purchasing uninsured/underinsured motorist coverage that is equal to or greater than your liability coverage. This will ensure that you have enough coverage to protect your personal assets in the event of an accident.
Can Uninsured/Underinsured Motorist Coverage Be Stacked?
In some states, uninsured/underinsured motorist coverage can be “stacked,” which means that if you have multiple vehicles on the same policy, the coverage limits can be combined. For example, if you have two vehicles on your policy with uninsured/underinsured motorist coverage limits of $50,000 each, you may be able to stack the coverage and have a total of $100,000 in coverage per person and $200,000 per accident.
Stacking can be a valuable option if you have multiple vehicles and want to increase your coverage limits without having to purchase separate policies for each vehicle.
Conclusion
Uninsured/underinsured motorist coverage is an important type of auto insurance coverage that can protect you in the event of an accident with an uninsured or underinsured driver. It’s a good idea to consider adding this coverage to your auto insurance policy, and to make sure that you have enough coverage to protect your personal assets. If you have any questions about uninsured/underinsured motorist coverage, be sure to consult with an insurance professional who can help you make informed decisions about your coverage needs.