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Underinsured Motorist Coverage: What It Is and How It Works

Almost every state in the country requires motorists to carry insurance policies on the vehicles they drive. However, if you are in an accident caused by another driver and he or she has only the minimum amount of required insurance coverage, it may not be enough to compensate you for your medical expenses, repairs to your vehicle, etc. If this is the case, then the driver is underinsured.

If an underinsured driver’s policy limits are not enough to cover all your damages, you could be responsible for paying the remaining amount even if the accident was not your fault. Underinsured motorist coverage protects you in this scenario. It picks up where the other driver’s policy left off and covers the rest of your expenses.

Types of Underinsured Motorist Coverage

There are two types of underinsured motorist coverage. One covers property damage. In other words, if the accident totals your car and the other driver’s insurance will not pay to repair or replace it, you would file a claim with your insurer under your underinsured motorist policy, then your insurer would cover the difference. This type of coverage also extends beyond your vehicle to any other personal property damaged in the collision. For example, if you had your laptop with you in the car and it broke in the accident, your underinsured motorist property damage coverage would reimburse you for its replacement.

The other type of underinsured motorist coverage is bodily damage coverage. This covers expenses related to any injuries that you sustained in the accident. It includes, but is not limited to, medical bills and lost wages. It extends to you and any other occupants of your vehicle.

Apart from what they cover, the main difference between the two types is that bodily injury coverage protects you in the event of a hit-and-run accident, while property damage coverage does not. Depending on where you live, the laws of your state may require you to carry at least one type of underinsured motorist coverage. However, you can still obtain either type of UIM coverage, or both, even if the law does not mandate it.

Advantages of Underinsured Motorist Coverage

Underinsured motorist coverage can grant you peace of mind. You know that you will not have to pay out of your own pocket if someone else causes an accident but lacks the ability to pay for the damage it causes. Additionally, UIM coverage is relatively inexpensive. If you insure more than one vehicle, you can increase your underinsured motorist coverage through stacking.

After a car accident, you likely have many questions regarding what happens next. A car accident lawyer, like a car accident lawyer in Woodland Hills, CA, would be happy to answer your questions regarding your legal rights. Contact an attorney today to arrange a consultation.

Thanks to Barry P. Goldberg, A Professional Law Corporation for their insight into what underinsured motorist coverage is and how it works.