The simplest way to understand this coverage: liability protects others; UM/UIM protects you.
What uninsured motorist coverage does
Uninsured motorist coverage steps in when the driver who hurt you has no insurance. Because they have nothing to collect from, your own UM coverage pays for your injuries, up to your UM limit, as if it were their liability. It is the coverage that keeps an uninsured driver’s choice from becoming your financial problem.
What underinsured motorist coverage does
Underinsured motorist coverage handles the more common case: the at-fault driver has insurance, but their limit is too low. If they carry a 25,000 dollar limit and your injuries cost 120,000 dollars, your UIM coverage can help bridge the gap up to your UIM limit. Given how many drivers carry only state minimums, this is a frequent and important gap.
Hit-and-run
If a driver hits you and flees and cannot be identified, uninsured motorist bodily injury coverage often responds to your injuries, subject to your policy and state rules. That makes UM more than theoretical; it covers the driver who is gone before the police arrive.
Should it match your liability?
A common and sensible approach is to carry UM/UIM at or close to your liability limits. It is easy to buy high liability to protect others and forget to protect yourself at the same level. When you compare quotes, check that UM/UIM was not reduced or rejected to lower the price, because that is one of the quietest and most costly downgrades a cheaper quote can make.
Continue the series
You are reading part 4 of How to Compare Auto Insurance Quotes Without Getting Burned.
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