What Is Underinsured Motorist Coverage?
Underinsured motorist coverage (UIM) is a type of car insurance that provides additional coverage in the event of an accident involving an underinsured driver. Underinsured motorist coverage is usually offered as an option with a standard car insurance policy, although it can be purchased as a separate policy if desired. This coverage can help cover any costs left unpaid by the other driver’s insurance policy, such as medical bills and vehicle repairs. Underinsured motorist coverage is also sometimes referred to as “excess” coverage, as it provides additional coverage beyond what is offered by the other driver’s insurance policy.
Underinsured motorist coverage is important to consider, as according to the Insurance Information Institute, about one in eight drivers in the United States are uninsured. Furthermore, the Institute reports that almost a quarter of drivers have insufficient liability coverage to pay for any damages they may cause in an accident. If a driver is underinsured and is found to be at fault for an accident, an individual may be left to pay for any damages out of pocket if they do not have underinsured motorist coverage.
How Does Underinsured Motorist Coverage Work?
Underinsured motorist coverage is designed to cover any costs left unpaid by the other driver’s insurance policy. It is important to note that underinsured motorist coverage will only cover what the other driver’s insurance policy does not cover. For example, if the other driver’s insurance policy covers $25,000 in bodily injury coverage, and you incur $30,000 in medical bills, then underinsured motorist coverage will provide an additional $5,000 to cover the remaining costs. It is important to note, however, that underinsured motorist coverage does not cover any property damage.
Who Should Get Underinsured Motorist Coverage?
Underinsured motorist coverage is a type of car insurance that should be seriously considered by any driver. It is especially important for those who live in states with high rates of uninsured drivers, as well as those who are more likely to be in an accident. For example, if you are a driver who commutes long distances on a regular basis, or if you live in an area with a high rate of car accidents, it may be a good idea to purchase underinsured motorist coverage.
Underinsured motorist coverage may also be a good idea if you drive an expensive vehicle, or if you have valuable items in your car that could be damaged in an accident. In these cases, the other driver’s insurance policy may not cover the full cost of the damages, and underinsured motorist coverage can help to cover the remaining costs. Additionally, if you have passengers in your car at the time of the accident, underinsured motorist coverage can help to cover any medical bills that may be incurred by your passengers.
How Much Does Underinsured Motorist Coverage Cost?
The cost of underinsured motorist coverage varies depending on the type of policy and the amount of coverage desired. Generally speaking, the cost of underinsured motorist coverage is about 10% of the cost of the policy. For example, if you have a $500/year policy, then you can expect to pay an additional $50 per year for underinsured motorist coverage. It is important to note, however, that some states may require drivers to purchase underinsured motorist coverage as part of their standard car insurance policy.
Conclusion
Underinsured motorist coverage is an important type of car insurance that can provide additional coverage in the event of an accident involving an underinsured driver. This coverage can help cover any costs left unpaid by the other driver’s insurance policy, such as medical bills and vehicle repairs. Underinsured motorist coverage is especially important for those who live in states with high rates of uninsured drivers, as well as those who are more likely to be in an accident. The cost of underinsured motorist coverage varies depending on the type of policy and the amount of coverage desired, but it is typically about 10% of the cost of the policy.