You’re responsible enough to ensure you always have car insurance. You keep your proof of insurance on you every time you drive, and you maintain, at the very least, your car’s minimum insurance coverage requirements.
However, not all drivers are as responsible as you are. That’s why underinsured motorist coverage is offered by insurance agencies-and required in some states. In this guide, we’ll look at underinsured motorist coverage and how it can protect you in the event of an accident.
What is Underinsured Motorist Coverage?
You may be familiar with uninsured motorist protection coverage. This addition to your auto insurance policy ensures that you’re financially protected in case you’re involved in a wreck with someone who doesn’t have insurance.
But what if the at-fault driver has insurance… just not enough? What if they’re carrying the legally required state minimum coverage but it’s not sufficient to cover the damage caused by the accident? What if resulting medical expenses are unexpectedly high and even their full coverage won’t pay for it?
That’s where underinsured motorist coverage comes in. Underinsured motorist coverage will help cover the difference between what the at-fault driver’s policy will pay and the actual cost of medical treatment and property damage resulting from the wreck.
Now, let’s look a little deeper at whether you need underinsured motorist coverage, how much it costs and how this insurance can protect you and your family.
Do I Need Underinsured Motorist Coverage?
Depending on where you live, you might be required to carry underinsured motorist coverage. Some states (14 at the time of writing) require it and you can face fines, suspension of your driving privileges, or even jail time if you don’t have this coverage on your policy.
Your insurance agent can let you know whether this coverage is mandatory where you live. But even if you discover that it’s not required to carry underinsured motorist coverage, you should ask your agent what it will cost to add it to your policy.
Protecting yourself against drivers who are underinsured can provide peace of mind and a great deal of financial assistance should you be involved in an accident. The coverage is usually relatively inexpensive-we’ll take a look at that in a moment-and can save you thousands of dollars in repairs and medical expenses when the time comes.
How Much Does Underinsured Motorist Coverage Cost?
In many states and through many insurance agencies, underinsured motorist coverage is lumped in with uninsured driver coverage. That does make it a bit difficult to estimate how much the insurance will cost you. On average, a married male will only pay between $30 and $70 per year.
You’ll need to speak with your insurance company representative about how much the coverage will add to your annual premium. Your agent will look at several factors, including:
- The percentage of underinsured drivers in your state
- The type of car that you drive
- Your credit history
- Your medical insurance, which may pick up where the underinsured motorist coverage leaves off
- The zip code where you park your car
- Your age, sex, and driving history
- The amount of coverage you desire for your policy
A variety of factors can influence how much you pay, but it’s fair to state that being prepared for an accident with an underinsured driver can make the price worth it, should you need it.
How Does Underinsured Motorist Coverage Protect Me?
The most important way underinsured motorist coverage protects you is by providing the financial coverage you need to cover property damage or medical expenses. However, there’s another reason you should consider adding it to your auto insurance policy.
Imagine for a moment that you’re shopping for a few things in the grocery store. When you return to your vehicle, you find that someone’s backed into it, causing significant damage to your bumper and headlight assembly. Are you responsible for the costs?
Most insurance companies’ underinsured motorist policies will cover you if the at-fault party drove away before you could exchange insurance information. You’ll file a police report, then file a claim with your insurance company, saving you hundreds-even thousands-of dollars.
Conclusion: Underinsured Motorist Coverage
If it’s not required in your state, the decision to include underinsured motorist coverage on your policy is up to you. However, be sure you speak with your agent about what this coverage can do for you. In the event that you’re in an accident, underinsured motorist coverage can save you a lot of money and stress.