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How Does Underinsured Motorist Coverage Work?

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Everyone understands that they have to have car insurance to operate their vehicle legally on the roadways. Most people, however, buy the most basic policy available to save on the monthly premiums. This may be beneficial to you each month, but these policies may not be enough to cover your losses in the event of an accident.

This is especially true of the person who hit your vehicle and caused your losses who was underinsured. They may have the lowest payout possible, but it was not enough to cover your losses when the accident happened. So how do you protect yourself?

The first thing that you should consider when purchasing car insurance is to have coverage for underinsured drivers. This rider on your policy can make a significant difference when an accident occurs.

How Does Underinsured Motorist Claims Work?

The underinsured motorist part of your insurance policy will only kick in if the payments from the responsible parties’ insurance were not enough to cover your losses.

For example, say that your injuries and losses came to $65,000. The person who caused the accident has a policy with a $50,000 limit. Once that limit has been reached, the balance of your losses would come from your policy, up to your policy limit. In this case, your policy would pay $15,000.

Of course, the payouts from this type of policy can become complicated. The insurer will first look to your regular auto policy for coverage before paying out anything from this add-on policy. Insurance companies can make it difficult to make a claim, which is why it will be in your best interest to speak with an attorney about your accident and claim.

Underinsured motorist insurance is not the same as uninsured motorist coverage. However, some insurers will sell the rider for your policy as underinsured/uninsured motorists. Most companies will only provide this type of coverage if you specifically ask for it when purchasing your policy.

Protect Yourself With The Right Types Of Insurance Coverage

One of the best things that you can do when you purchase insurance is to make sure that you have enough protection for yourself and others in the event of an accident. It can be very tempting to purchase the least amount of coverage to be legal to drive to keep the rates low. But if an accident happens, you may regret this choice.

If you are underinsured and responsible for an accident, you may be held liable for any additional expenses the other person incurred if they do not have underinsured motorist coverage. This could be devastating to you and your family. The best choice is to have the coverage you need in place.

If your insurance company does not offer underinsured motorist coverage or offers it only at a high premium, it may be beneficial to shop around to different insurers to get the coverage you need. Some insurers will not sell this type of coverage because that would make them liable in the event of an accident when they would prefer that liability rests on the person who caused the event.

If you have any questions about underinsured motorist coverage when you have been involved in a car accident, speak with your car accident attorney. Your attorney can explain to you in detail how this coverage will protect you and where the compensation will come from for your losses.