Underinsured Motorist Coverage
Underinsured Motorist (UM) coverage is one thing you’re always glad to have when you need it. If the other driver is at fault and has liability insurance, you’re not necessarily in the clear, especially if you or your passengers have extensive injuries.
When you add UM to your insurance policy, you protect yourself in case the other person’s insurance isn’t able to pay all your expenses. Your UM kicks in after the other driver’s insurance limit is exhausted so that you don’t have to make up the difference. You could take the claim to court, of course, and your insurance company might want to make a follow-up claim against the driver, but chances are that you don’t want to become embroiled in a legal suit in addition to your medical woes. Your UM insurance will likely cover punitive damages (pain and suffering) and in some states will even cover property damages.
States have different laws governing UM claims. If the driver’s liability limit is $50,000 but your expenses are $75,000, most states will allow you to make a claim for the difference between the two figures. Some states will allow you to draw the full amount of your coverage; if your UM insurance is for $100,000 and your losses are $75,000, those states will award you the full amount from your policy. In this case, you will use the other driver’s insurance plus $25,000 from your policy and pocket the remainder. Other states will limit your award to the monies needed to cover your losses and no more. So you lose your mini car, and that’s it. 