Underinsured Motorist Insurance Coverage and Personal Injury

Is there a difference between and underinsured motorist claim and an uninsured motorist claim?

Yes, there is a difference between an uninsured and underinsured motorist claim. In an uninsured motorist claim the driver who caused injury is without any coverage. In an underinsured motorist claim the driver possesses some coverage. But the coverage the driver possesses is not enough to fully pay for the injuries suffered.

What is an example of an underinsured motorist claim?

You are hit by a driver with only $15,000 in liability coverage. Your medical bills, loss of income, hassles, stress and the disruption in your life total $50,000. Obviously $50,000 is more than $15,000. If you possess $25,000 in underinsured motorist coverage you may be able to collect up to $25,000 from your own insurance company. It is not the full $50,000, but it is $10,000 more. If you possessed $50,000 in uninsured motorist coverage you may be able to recover the full $50,000 in damages. This is why it is good to carry higher limits of the underinsured motorist coverage. It is coverage which is protecting you and those who use car or truck , including passengers.

Does uninsured motorist coverage work the same throughout the country?

No, uninsured motorist coverage does not work the same throughout the country. Some state laws restrict the amount you can get under your underinsured motorist coverage. As an example, California provides an offset for the amount of coverage possessed by the responsible driver. In California if you have $100,000 in coverage and a claim which is valued at $75,000 or more the amount of liability coverage for the responsible driver is subtracted from your coverage. If the responsible driver possessed $15,000 of liability coverage you collect only $60,000 for your claim which is valued at $75,000. This is the value of the claim, $75,000 less the $15,000 coverage for the at fault driver. In Nevada, the state right next to California, things work much differently. Given the same facts in Nevada you would collect $75,000 through your underinsured motorist coverage. This is a $15,000 difference, which is the amount of liability coverage possessed by the responsible driver. There are other differences. An important difference is some states like Nevada allow a person with underinsured motorist coverage to stack coverages from multiple automobiles. In Nevada if you have three cars with $100,000 each in uninsured motorist coverage you have a total of $300,000. In California you only have $100,000.

Is underinsured motorist coverage shown on my policy as separate coverage?

Insurance companies handle the existence of the underinsured motorist coverage differently. Look at your declaration sheet. It is at the beginning of your insurance policy and list the coverages, such as liability, comprehensive and collision. You may see a separate entry for uninsured motorists coverage and a separate entry for underinsured motorist coverage. Many times there will simply be one entry showing UM coverage or UM/UIM coverage. If your policy shows any of these things you generally have coverage.