If you drive a car, then you probably have seen a reference in your car insurance to uninsured and underinsured motorist coverage. Maybe your policy statement indicates that a portion of your car insurance premium goes to provide you with uninsured and underinsured motorist coverage.
Maybe your insurance agent has told you that you should increase the amounts of uninsured and/or underinsured coverage that you have purchased. Understanding the protection that each coverage gives you and the differences between the two will allow you to choose and pay for the insurance which best protects you and your family in the event that a serious car accident occurs.
Uninsured Motorist Coverage
Uninsured motorist coverage protects drivers from individuals who do not have any insurance on their cars to pay claims for property damage and bodily injuries. It also covers hit-and-run drivers and "phantom drivers," who cause an accident but do not stop because they do not know about their involvement.
Underinsured motorist coverage pays the difference when the at-fault driver's insurance is insufficient to compensate the accident victim for the injuries suffered in an accident. In some states, one or both of the coverage is mandatory in order to drive a car. In other states, uninsured and underinsured coverage is an option. Still other states include the notion of insufficient or under insurance in the definition of an uninsured driver.
Auto Insurance in General
To understand the distinctions between uninsured and underinsured motorist coverage, you must first be generally familiar with the subject of car insurance as a whole. Almost every state in the country requires an individual operating a motor vehicle to obtain automobile insurance. Most states allow the driver to choose whether they want insurance to cover their own car in the case of a collision.
On the other hand, most states require that a car driven on the road have a minimum amount of insurance to cover liability for property damage and bodily injury caused to other vehicles and drivers. Some states set minimum requirements for such liability coverage.
Whether the state mandates the amount or the driver purchasing the vehicles chooses an amount, if an accident occurs, the insurance on the at-fault car only covers damages from the accident up to the specific amount of the insurance purchased. The maximum amount that the car insurance company will pay to an individual or to a number of individuals injured in a single accident is called the policy limits or the limits of liability.
Uninsured Motorist Covers Hit and Run Accidents
If you are involved in a hit and run accident or an accident with someone who does not have insurance, any property damage or bodily injury claims you have would be covered by your own uninsured motorist coverage. The amount of insurance available for such claims is determined by your pre-existing contract of insurance. If you have the state-dictated minimum, then that is the policy limits for your uninsured motorist claim. If you have purchased additional coverage, then that amount of protection is available to you.
You know best how much insurance you and your family would need in the event of a serious accident. Purchasing that amount in uninsured motorist coverage prevents an uninsured driver from depriving you of adequate insurance coverage. Similarly, purchasing adequate underinsured motorist coverage lets you choose the amount of insurance that will cover you in the case of a serious accident.
Underinsured motorist coverage pays the difference between the damages you have and the insurance available on the at-fault vehicle. Utah law allows your underinsured motorist coverage to be added on top of the at-fault driver's policy limits. That means your entire underinsured motorist coverage is available to you to the extent that your damages exceed the at-fault driver's policy limits. In these states, if you had $100,000 damages, a driver with $30,000 policy limits and a $50,000 underinsured motorist policy, you would receive $80,000 because your underinsured motorist coverage is added to the at-fault driver's policy limits.
No Requirement to Purchase Uninsured/Underinsured Coverage
Utah law does not require you purchase uninsured motorists or underinsured motorist coverage. However, if you do purchase such coverage, Utah law requires that you buy at least $25,000 per person or $50,000 per accident of uninsured motorist coverage. Utah law requires that you purchase at least $10,000 per person or $20,000 per accident of underinsured motorist coverage.
Understanding the difference between uninsured and underinsured motorist coverage lets you prevent one of the worst consequences of a serious car accident: insufficient insurance to compensate you for your injuries.
You may wish to contact your insurance agent or an attorney who knows the insurance laws in your state to determine which uninsured and underinsured laws apply to you. That way, you can assess the risks associated with an accident involving an uninsured or underinsured motorist in your state and purchase the right amount of insurance to adequately protect your family.