What is ‘Underinsured Motorist’ Coverage?
Underinsured motorist (UIM) coverage is a type of car insurance that provides protection in the event you are involved in an accident with a driver who does not have enough insurance to cover the damages and medical expenses resulting from the accident. This coverage serves as a financial safety net, ensuring that you can recover costs that exceed the at-fault driver's liability limits.
Why is UIM Coverage Important?
Many drivers may carry state-mandated minimum insurance limits, which can be significantly lower than the actual costs incurred in the event of an accident. This can leave victims undercompensated for their injuries, lost wages, and other related expenses. Underinsured motorist coverage helps bridge this gap, allowing you to claim additional funds from your own insurance policy when the at-fault driver's insurance falls short.
How Does UIM Coverage Work?
In the event of an accident with an underinsured driver, you would first file a claim with the at-fault driver's insurance company. If their coverage proves inadequate to cover your damages, you can then file a claim with your own insurance company under your UIM policy. The payout will depend on your coverage limits and the extent of your damages.
Is UIM Coverage Required?
UIM coverage is not mandatory in all states; however, it is highly recommended. Many insurance companies offer it as part of their standard auto insurance policies. Check with your provider to understand the specifics of your policy and local regulations.