As a responsible driver, you likely have insurance coverage to protect you in case of an accident. However, what you may not know is that there is a type of coverage called Underinsured Motorist (UIM) insurance that can provide additional protection for you and your loved ones. In this article, we will take a closer look at UIM insurance and why it may be beneficial for you to have.
What is UIM Insurance?
UIM insurance is a type of coverage that provides additional protection for you and your passengers in the event of an accident where the other driver is at fault and does not have sufficient insurance to cover the damages. For example, if a driver with only the minimum required insurance coverage hits you and causes damage that exceeds their policy limit, their insurance will only cover up to their limit. UIM coverage can help cover the remaining damages.
It is important to note that UIM coverage is different from Uninsured Motorist (UM) coverage. UM coverage provides protection for you and your passengers in the event of an accident where the at-fault driver does not have any insurance at all. In contrast, UIM insurance provides protection when the at-fault driver has insurance, but their coverage is not enough to cover the damages.
How Does UIM Insurance Work?
If you are involved in an accident where the other driver is at fault and their insurance policy limit is not enough to cover the damages, you can file a claim with your own insurance company under your UIM coverage. Your insurance company will then pay out the difference up to the limit of your UIM coverage, helping to cover the remaining damages.
It is important to note that UIM coverage is not mandatory in all states. However, some states require insurance companies to offer UIM coverage to their policyholders. It is also worth noting that UIM coverage is generally more affordable than UM coverage, as it is less likely to be used.
Why Should You Consider UIM Insurance?
There are several reasons why you may want to consider adding UIM coverage to your insurance policy. One of the main reasons is that it provides an additional layer of protection for you and your passengers in case of an accident with an underinsured driver. Without UIM coverage, you could potentially be left with significant financial burdens if the other driver’s insurance is not enough to cover the damages.
Another reason to consider UIM coverage is that it may help you avoid a lawsuit. If the other driver’s insurance is not enough to cover the damages, they may be held personally responsible for the remaining balance. This could result in them taking legal action against you to try to recoup the costs. UIM coverage can help prevent this from happening by covering the remaining damages.
How Much UIM Coverage Do You Need?
The amount of UIM coverage you need will depend on several factors, including your budget, your driving habits, and the minimum insurance requirements in your state. It is generally recommended that you have enough coverage to cover the full cost of damages in case of an accident with an underinsured driver. Your insurance agent can help you determine how much coverage is appropriate for your specific situation.
FAQ
Q: Is UIM coverage required by law?
A: UIM coverage is not required by law in all states. However, some states require insurance companies to offer UIM coverage to their policyholders.
Q: How is UIM coverage different from UM coverage?
A: UIM coverage provides protection when the at-fault driver has insurance, but their coverage is not enough to cover the damages. UM coverage provides protection for you and your passengers in the event of an accident where the at-fault driver does not have any insurance at all.
Q: Will UIM coverage increase my insurance premiums?
A: Adding UIM coverage to your insurance policy may increase your premiums slightly. However, the cost is generally low compared to other types of insurance coverage.
Q: How do I know if I have UIM coverage?
A: To find out if you have UIM coverage, you can check your insurance policy or contact your insurance agent.
Q: Can I use UIM coverage for hit-and-run accidents?
A: In most cases, UIM coverage can be used for hit-and-run accidents where the at-fault driver cannot be identified. However, it is always best to check with your insurance company to confirm.
Summary
UIM insurance provides additional protection for you and your passengers in case of an accident with an underinsured driver. It can help cover the remaining damages when the other driver’s insurance is not enough to cover the costs. While UIM coverage is not mandatory in all states, it may be worth considering for the added layer of protection it provides.
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