What Is Uninsured and Underinsured Motorist Coverage?

by Darryl James

Research conducted by the Insurance Research Council places the number of drivers without insurance (uninsured motorists) as high as 25 percent in some states. That number typically includes drivers who are insured below the state's required minimum coverage (underinsured motorists). Even if you are carrying insurance, you may not be protected if one of these drivers hits you. And even though the remaining drivers have at least the minimum coverage required by law, damage to your vehicle or injury to you may exceed the limits of their policy, which means that they are underinsured motorists.

Function

If an insured driver gets into a collision with an uninsured or underinsured motorist, uninsured or underinsured motorist (UI/UM) insurance policies will pay for damage to the insured driver's vehicle as well as any injuries sustained by the driver or passengers in the insured's vehicle.

Enhancement to Existing Coverage

Uninsured and underinsured motorist insurance policies can be confusing because collision insurance covers damage caused by other vehicles. However, both UI/UM enhance collision insurance and protect policyholders even in the event of a hit-and-run collision, and in the case of uninsured motorists insurance, even if the policyholder has no information on the liable driver who escapes. UI/UM both compliment collision coverage, but may also be purchased to enhance a basic liability policy without collision insurance.

Underinsured Coverage

Underinsured motorist insurance kicks in when a liable driver does not have enough insurance to cover your damages. Your insurance will determine the amount that will be paid by the responsible party and then pay the rest. The limit of this coverage listed on your policy may be confusing, because it refers to the total amount that both your insurance company and the underinsured motorist's insurance company will pay, as opposed to an additional amount your insurance company pays.

Uninsured Insurance Components

Uninsured motorist insurance has two components--property damage and bodily injury protection--just as liability insurance does. Uninsured motorist property damage insurance covers the damage to an insured driver's vehicle, while uninsured and underinsured motorist bodily injury insurance covers any injuries sustained by the driver or passengers of an insured vehicle. While some states only allow insurance companies to sell uninsured motorist bodily injury coverage, many states allow the sale of both. Uninsured motorist insurance typically covers you while you are a pedestrian, in the event you are hit by a vehicle without insurance coverage.

Limits

While an underinsured motorist addendum provides an amount above the coverage of the other driver, uninsured motorist insurance is restrained to the boundaries of the policyholder's own liability limits.

Deductible

As with any other type of coverage, both underinsured and uninsured insurance come with a deductible, which is the amount that the policyholder pays before the insurance kicks in.

About the Author

Darryl James, a syndicated columnist and freelance writer in the Los Angeles area has written for more than 15 years for "New York Newsday," "Pittsburgh Courier," "The Los Angeles Sentinel," "Women's Wear Daily," "Apparel News," "Rap Sheet" and more. James has written books and has just finished his first screenplay.

Photo Credits

  • photo_camera car crash image by dawn from Fotolia.com