Auto Insurance Policies 101: Uninsured & Underinsured Motorist


Uninsured motorist insurance and Underinsured motorist coverage are types of insurance that protect you against damages and injuries caused in an automobile accident where the other driver’s liability car insurance coverage is inadequate. In most states neither uninsured or underinsured motorist coverage is required, but some states require one or the other. Both uninsured and underinsured motorists coverage is often required in “no fault” auto insurance states. Because of the different requirements from one state to another most insurance companies will automatically include both in their standard auto insurance policies.

Uninsured motorist insurance and Underinsured motorist coverage are often lumped together in an auto insurance policy. However, they’re really two distinct and separate coverage parts of an auto insurance policy.

Uninsured motorist insurance is needed when the other driver has no liability coverage, or not enough liability insurance to fully cover a loss. The limits, coverage details and amount of protection can be very different depending on state insurance laws. Uninsured motorists insurance typically pays for your expenses when they result from an accident caused by an uninsured driver. An uninsured driver must be the one who is responsible for causing the loss or accident. Uninsured is usually defined to include:

  • A person who has no insurance.
  • A person who can’t be located, such as a “hit and run driver”
  • A person who has insurance, but their insurance company is financially incapable to provide coverage
  • And other situations which may be considered to involve an “uninsured” motorist.

Payment under this coverage part may be controlled by the limits mandated by your state’s financial responsibility law. Some states may have specific uninsured motorist legislation that dictates what limit or limits must be offered to insurance consumers. In some states, a consumer may choose to reject the coverage, with a written request.

Underinsured motorist coverage pays for the cost of your injuries that exceed the other driver’s liability coverage maximum. Although the coverage concept is similar to uninsured motorist, this coverage is for injuries caused by a driver who is inadequately insured. When another driver is considered to be the cause of the accident and you suffer injuries, underinsured motorist coverage on your policy will act as excess insurance. Underinsured motorist coverage pays for your medical and injury expenses that exceed the amount of insurance protection available from the other driver’s policy. For example: If you are seriously injured by a person who carries a bodily injury liability limit of $50,000. And your injuries amount to $75,000. in medical and related costs. If your auto insurance Underinsured Motorist Coverage limit is $100,000. Your policy would pay the difference between $50,000. and $75,000.–or the additional $25,000.

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