Understanding Uninsured and Underinsured Motor Insurance Coverage

By | November 25, 2012

Many people often confuse with uninsured and underinsured motor/auto insurance coverage. Both the insurance covers provide cover for bodily injury and property damage. Bodily injury typically pays for medical expenses for you, your family members/passengers. Property damage coverage typically pays for the damages occurred to your vehicle. In many states these two covers are included in collision insurance coverage, so check whether you are buying same coverage twice.

Now we will discuss about the difference between uninsured and underinsured motor insurance coverage.

Uninsured motor insurance coverage:
Uninsured motor insurance coverage protects you if you meet with an accident caused by someone who does not have minimum level of insurance required by your state law. The insurance company pays you for the claims made against the driver who was at the fault.

Underinsured motor insurance coverage:
Underinsured motor insurance coverage protects you if you met with an accident by someone, who has liability insurance coverage less than the limit of your underinsured motor coverage. That means, if your damages are greater than the liability limit of the driver at fault, you can make a claim against him for the amount of damages not covered by his policy. This amount will be the difference amount between the limit of your underinsured motor coverage and the fault drivers’ liability coverage.

Points to remember:

  • The uninsured motor insurance coverage would not have a limit higher than the liability cover which you own.
  • Also, uninsured motor insurance coverage doesn’t benefit if you are uninsured driver.
  • You can buy underinsured motor insurance coverage more than the minimum limit of liability.
  • Both the insurance covers are sold together.