One of the most frequently misunderstood forms of auto insurance coverage is uninsured/underinsured motorist protection. All drivers have the option of buying this protection, but many decide against this coverage because they don’t entirely understand what it is.
If you want to make sure that you are properly covered, then it’s important for you to learn what uninsured/underinsured motorist protection does and what the difference is between those two forms of coverage.
Uninsured motorist coverage is what protects you in the circumstance when you are injured or your car is damaged by a completely uninsured driver who does not have the financial capability to pay you for the damages that he or she caused. Uninsured driver insurance is often explained as a type of liability insurance to protect against damage to your property by any driver who does not have an auto insurance policy.
If you do not purchase this coverage and you are struck by an uninsured driver, suing that driver is the only thing that you can do to attempt to receive compensation for the damages. That said, if an individual does not have any insurance, then the odds are that even if you win the lawsuit, he or she will still not have the financial means to pay you the amount that is necessary to cover whatever damages occurred.
Underinsured motorist coverage, on the other hand, is a similar form of protection, though not quite the same. A driver who is underinsured is one who has purchased insurance coverage, but not enough to pay for any accidents over the most minor fender benders.
The most common form of this circumstance occurs when the driver who caused the accident has purchased only the bare minimum liability insurance allowed in the state. If this occurs, for example, in New Jersey, then this minimum limit is only $5,000, which means that if the damage caused by that driver is worth $15,000, then the insurance will cover only $5,000 of that amount.
The rest of the money will need to be paid out-of-pocket by the underinsured driver, and the odds of that are slim. It will be up to you to recoup those funds in some other way. That’s where underinsured driver insurance comes into play.
When you add uninsured/underinsured motorist coverage to your auto insurance policy, then you will have the peace of mind of knowing that regardless of what happens and who the other driver might be, you have the coverage you need.