In today’s economy where many people are looking to cut any costs they can, the number of drivers driving around without insurance has increased. Also, drivers are driving around with lower liability limits than maybe they had during good economic times. This makes the coverage of uninsured and underinsured motorist even more import. So I thought with this blog post, I would take the opportunity to explain a little bit more about what exactly that coverage does.
Uninsured motorist coverage protects you if you are hit by someone who has no insurance (up to your uninsured motorist limit) where as underinsured motorist protects you if you are hit by someone who has very low limits, limits lower than your own liability limits. Both of these coverages should be included in your typical auto insurance policy.
The best way to explain what these coverages do is to give you an example of situations where this coverage comes into play.
Say that you were to be driving down the road and an individual ran a red light and slammed into you causing you bodily injury. Say that they also didn’t have any insurance to help pay for your $40,000 of medical bills from the resulting injuries. This is where your uninsured motorists coverage on your personal auto policy steps up. Under that coverage they would pay the bills of $40,000 along with other expenses such as lost wages.
Using the same example as above but lets say this time the person who ran the red light does have insurance but they have state minimum limits. The most that will pay out under a state minimum limit policy in Ohio is $25,000 per person. That means you would be left with $15,000 in medical bills plus your lost wages. However, this is where underinsured motorist coverage helps. As long as your auto policy has higher limits than the individuals who hit you, it will pay the extra costs (up to your policy limits).
One last thing to note, on this type of coverage you can purchase even more coverage on an umbrella policy in increments of $1million dollars.