Generally speaking, uninsured/underinsured (U/UI) policies will protect you in the event that you are hit by a driver who has no coverage or doesn’t have enough insurance to pay for the damages they cause. Many people ignore this type of coverage, which is a very unwise thing to do. In fact, about one out of seven U.S. drivers do not have enough insurance coverage to satisfy the laws of the state in which they live. That means about 15 percent of accidents involve at least one uninsured or underinsured driver.
In order to protect yourself from this threat, you can carry U/UI insurance. What will a U/UI policy do for you, and why is it necessary?
Uninsured/Underinsured Motorist Coverage is a Financial Safety Net
This kind of insurance coverage might be your only recourse if the at-fault driver has no liability coverage or doesn’t have enough of it. Your only option in such a disastrous scenario would be to take the person to court and sue of damages. That’s an expensive route that includes up-front legal costs for you and the distinct possibility that even if you win a judgment, the person won’t have the money to pay you.
A U/UI policy is your safety net to prevent such a financial nightmare. It will pay for any lost wages and medical expenses you incur as a result of the accident. Some U.S. states now allow motorists to buy U/UI policies that also cover property damage. That means you would be protected against medical bills, lost wages and car repair expenses even if you’re hit by a motorist who has no insurance at all.
It’s Often Required by State Law
A number of U.S. states require motorists to have at least a “bare bones” U/UI policy. Coverage like this typically pays for medical expenses and lost wages but not for property damage. However, if you want to add a property damage component to your U/UI policy, it’s your choice to add one, and it makes good sense to do so.
What about Underinsured Drivers?
If you’re hit by a driver who does, in fact, have insurance, you are not necessarily protected. That’s because many drivers carry liability policies with upper limits that aren’t high enough to reimburse your medical expenses and vehicle damage.
If you have underinsured coverage, you won’t need to worry about the at-fault driver’s coverage limits because your own U/UI policy will take care of whatever the at-fault driver’s policy does not cover. And if you carry a property damage component within our U/UI coverage, you’ll be able to collect reimbursement for any damage to your vehicle as well.