Insurance is a necessity associated with owning a car. Acquiring auto insurance also brings with it the need to understand the terms of auto insurance when reviewing your policy. This ensures that you get the most suitable offer. However, some terminologies may be ambiguous or unfamiliar, and some guidance is needed to give you an idea of what is covered. Such knowledge can help you minimize claim rejections.
What is underinsured motorist coverage?
When a driver is responsible for an accident, they are usually responsible for paying liabilities such as injuries and damages to third parties. But sometimes their liability insurance limit may not be sufficient to cover the consequences of the accident. This is where underinsured motorist coverage comes in.
The underinsured motorist guarantee is an insurance which covers the deficit due to third parties when the insurance cover of the driver at fault is insufficient to compensate for the damage he has caused. The policy covers you when you are the victim of an accident with an at-fault driver whose insurance is insufficient to compensate for the damage he has caused you.
Coverage for underinsured motorists usually supplements the remaining amount. For example, if you had medical bills and car damage totaling $100,000 and the other driver’s insurance can only cover $65,000, you can file a claim with your insurer. automobile for the remaining $35,000. However, you cannot claim more than the total loss resulting from the accident.
Coverage for underinsured motorists is divided into two categories. Underinsured Motorist Bodily Injury (UIMBI) covers medical expenses, while Underinsured Motorist Damage covers repairs or replacement of the damaged vehicle.
According to Access Insurance, this coverage also pays for lost wages, pain and suffering, and even property damage in some cases.
What is uninsured motorist coverage?
Coverage for underinsured and uninsured motorists can seem ambiguous. Sometimes insurers may offer both, but you should not confuse them. Uninsured motorist coverage differs from underinsured motorist coverage in that it covers your expenses when you are involved in an accident with an uninsured driver.
The policy is divided into two categories. Uninsured Motorist Bodily Injury covers costs associated with injuries caused by an uninsured driver, while Uninsured Motorist Property Damage repairs or replaces property damaged by an uninsured driver.
Your insurer covers the full amount within the limits of your policy. In some states, uninsured motorist coverage may cover damage caused by a hit-and-run involving an insured driver.
However, this may not be the case in some cases and you would need collision insurance to cover expenses resulting from a hit-and-run.
The importance of adequate coverage and the different types you can have
It is wise to have adequate insurance coverage, as this saves you from paying out of pocket for the costs of the accident. Although the driver at fault is usually responsible for these costs, sometimes this person is uninsured or does not have enough insurance to pay his debts.
Coverage for underinsured and uninsured motorists allows you to take control in such cases without having to wait for driver intervention or use your money. You can also purchase personal injury protection, which pays for your medical expenses and those of your passengers in the event of an accident, regardless of who is at fault.
If the tables are turned and you are responsible for the accident, adequate liability insurance allows you to compensate the affected third parties. Suppose your liability coverage is inadequate and the affected motorists do not have underinsured coverage. In this case, they can sue you, in which case you will have to cover the expenses with your own money.
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