What is the difference between uninsured and underinsured motorist insurance coverages?
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Asked February 10, 2011
Uninsured/underinsured motorist coverage is typically offered as a paired coverage, but they relate to two separate types of circumstance. The one thing that they have in common is that they are intended for bodily injury only, and do not cover damage to your vehicle or other property.
If you are involved in an accident and the at fault person does not have any insurance, your car insurance will cover bodily injury claims for you and persons in your vehicle up to the total amount of your uninsured motorist coverage. This is an important factor in considering how much insurance you need, because you are planning for the person's in your vehicle and the consequences of what could happen to them if you do not have sufficient insurance.
Underinsured motorist coverage is your protection against a situation where the at fault driver had insurance, but not enough to cover the bodily injuries sustained by you and your passengers. When that person's insurance has reached it's limit, your underinsured motorist coverage kicks in pays any remaining injury related costs up to the amount of your coverage.
One way that the joint coverage can affect you would be if you had to file an underinsured motorist claim and then had to file an uninsured motorist claim a short time later. It is possible that the payout on the first accident would not leave you enough coverage for the injuries related to the second accident. Check your policy to find out whether the limits are per accident, or per policy, as that can make a great deal of difference in how affordable your current policy is over the long term.
Answered February 10, 2011 by Anonymous