What is underinsured motorist coverage?
Underinsured motorist coverage is a feature offered by car insurance companies to protect insured customers from injury or damage caused by an at-fault driver. For instance, if you are driving down the road, someone hits your vehicle and admits fault, it is their car insurance company’s responsibility to compensate you.
However, if the driver does not have sufficient car insurance, your underinsured motorist coverage will ensure that you will be taken care of. Because laws vary from state to state, some motorists may only carry the bare minimum allowed by law and many do not require underinsured motorist coverage, only uninsured motorist coverage, so it is extremely important that you understand the difference.
Underinsured motorist coverage is usually considered an elective and can increase your annual premium slightly. This can be a reason why some do not choose this feature. The reality is underinsured motorist insurance coverage can provide an extra layer of protection that you may need someday and should be considered carefully when making policy selections.
What happens if I am injured in an accident by an underinsured motorist?
If you elect underinsured motorist coverage as part of your car insurance policy, you can be protected if you become injured in an accident. Medical treatment due to a car accident is covered by the person who caused the accident and it is their insurance company’s responsibility to guarantee payment to you, up to the maximum limit of the policy.
However, extensive medical issues, like surgery, physical therapy, and follow-up care can cause the costs to rise rapidly. If the at-fault motorist does not have sufficient coverage, this is when your own underinsured motorist coverage comes into play. As long as your policy is active at the time of the accident, you can receive additional money, up to your selected maximum, to continue to receive the medical care you need to make a full recovery.
Some states may even allow your car insurance company to request payment for wages you lost, and any extreme pain or suffering as part of underinsured motorist coverage. These are options to be aware of if you are involved in an unfortunate car accident and require long-term medical care keeping you from work for an extended period.
How much does underinsured motorist coverage cost on average?
An average minimum amount of coverage of approximately $20,000 can cost about $10 per year for underinsured motorist coverage. As you increase your limits, the cost also increases. When making your selections, remember the rising cost of healthcare and choose wisely. It may be more prudent for you to pay an extra $5 or $10 per month to increase your minimum from $20,000 to $75,000 or $100,000 just to be safe.
Underinsured motorist coverage can also provide you with assistance with funeral costs, if the accident results in a death and the at-fault driver’s insurance cannot provide sufficient coverage. This is another reason why you should contemplate your decisions carefully.
While many people who already carry collision coverage tend to think of underinsured motorist coverage as overkill, it can actually benefit in many ways. For instance, you might save more money. If your state requires a minimum of liability coverage, only you can pair the basic package with underinsured motorist property damage coverage for a lower rate than collision. Many states charge a lower deductible when you choose underinsured motorist property damage coverage over collision.
What happens if my car insurance company denies my underinsured motorist claim?
While each state has their own laws regarding the automobile insurance industry, the majority have processes in place for appeals if a claim is denied. You may be required to go to arbitration or be advised to take your complaint directly before a judge. First, read your entire policy and identify any areas of question. Take your concerns to an attorney who specializes in automobile insurance law.
The lawyer is a subject matter expert and can provide you with a world of knowledge. They can also help you prepare any documents that are necessary to begin your appeal. If your policy requires arbitration, your lawyer can explain the process and give you a basic outline of what you can expect. Under normal circumstances, arbitration can resolve disputes without the interference of a judge.
If you do not agree with the decision of the arbitrators, you may be able to take your case to the courts. Your attorney should also guide you with this step and prepare you for the outcome. Just because you are going to see a judge, does not guarantee that your denial will be reversed. You need to make sure that you are setting yourself up for the best possible results so you can receive the monetary payment you deserve.
Understanding the different types of car insurance is critical to anyone who operates a motor vehicle. Not only must you have the proper level of insurance coverage, but you must also be aware of the implications surrounding insufficient insurance coverage and your liabilities. Get the facts and take the necessary steps required to protect yourself and other drivers on the road before it’s too late.