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Uninsured/Underinsured Motorist Coverage Explained

Car accidents happen every day. However, what happens when the other party that hit your car does not have any insurance or doesn’t have enough liability coverage? What happens if the other party leaves before you can get their insurance information? These and many questions are the reason why uninsured and underinsured coverage exists. These insurance products are designed to save you from the financial weight of the decisions made by irresponsible drivers. If you are interested in learning some interesting facts about insurance, below are some of the things you need to know about uninsured and underinsured motorist coverage.


How Uninsured And Underinsured Motorist Coverage Works


As a vehicle owner, it is understandable that you want to know how a product like uninsured and underinsured motorist coverage works. If you have been involved in an accident due to no fault of yours, the other party is expected to cater to the damages that you have suffered, whether property-wise, bodily injury or both. However, in some cases, you may find that the at-fault driver does not have car insurance to begin with, or does not have enough liability coverage. When such happens, you are mostly left to fend for yourself. Taking into consideration the high cost of medical attention as well as the cost of property repair and/or replacement, uninsured and underinsured motorist coverage appears to be a smart financial decision to make.


What Is Underinsured Motorist Insurance?


This insurance product is designed to help you to pay for expenses incurred as a result of another party’s negligence, especially when they do not have enough liability to cover the extent of the damages caused. In some states across the United States, you may get a bundle offer of both the underinsured and uninsured motorist insurance while in some other states, these are electable products to choose from.


Please note that each state defines underinsured differently. A driver who doesn’t have enough liability coverage is typically described as underinsured, however, if the at-fault driver has just enough to cover for the third party’s damages alone, he or she may also be regarded as underinsured.


Difference Between Uninsured And Underinsured Coverage


For states where this insurance product isn’t bundled into one, the main difference between both insurance solutions is that the Uninsured motorist product caters to the need of drivers who have been hit by a third party that doesn’t have insurance coverage. On the other hand, the underinsured coverage is focused on drivers who have been hit by other drivers who do not have enough liability to cover the extent of the damage caused.


Types Of Uninsured And Underinsured Motorist Coverage


Uninsured and underinsured motorist coverage can be further broken down into two distinct types based on the type of damages covered.


– Uninsured or Underinsured Motorist Bodily Injury Coverage


This type of insurance covers all the bodily injury that the insurance policyholder may face on account of an uninsured or underinsured driver’s negligence. This will cover common bills and damages like lost wages, medical bills, as well as pain and suffering.


– Uninsured or Underinsured Motorist Property Damage Coverage


This is focused on offering repair or replacement for the policy holder’s damaged property in the aftermath of an accident caused by a party who is underinsured or doesn’t have insurance coverage.