Is there a difference between uninsured and underinsured motorist coverage? Yes! Although both protect you from delinquent drivers, one cannot substitute for the other. Generally, uninsured motorist coverage covers accidents wherein the at-fault driver has zero insurance, while underinsured coverage applies when the at-fault driver has insufficient coverage.
Learning the policy limitations will help you decide between the two coverages. After all, not every state requires them. As such, motorists and trucking companies have total control over whether they get underinsured and uninsured motorist coverage.
To ensure that you don’t pay for repairs and medical bills out of pocket if you get into an accident with delinquent drivers, get uninsured and underinsured motorist coverage (UM/UIM). Many motorists drive around without insurance.
The main advantage of getting UM and UIM coverage is they speed up claims processing. Insurers prolong claims wherein the motorists lack insurance. Additionally, they would often force the at-fault driver to shoulder the fees or face legal charges.
Insurers could even reject claims if they do not identify the driver responsible for the accident. Not all policies cover hit-and-run incidents. Unfortunately, the injured motorists involved might need to pay their hospital bills themselves in these cases.
Note: Both UM and UIM don’t typically cover vehicular repairs unless motorists purchase property damage. You’ll have to use your collision insurance instead.
Uninsured motorist (UM) coverage protects you from motorists that carry zero insurance. Yes, all states require liability coverage. Surprisingly, however, statistics show that 12.6% of motorists still don’t carry liability insurance. These statistics don’t even include unlicensed teen drivers.
Pro Tip: Ideally, your UM should cover the average cost of an accident. UM pays for significantly more damages than UIM, so you might end up with insufficient funds if you don’t increase your policy limit.
Underinsured motorist (UIM) coverage covers incidents wherein the at-fault driver does not have sufficient insurance. For instance, let’s say a collision leaves you with $15,000 worth of hospital bills, but the other driver only has $10,000 in insurance. As a result, UM shoulders the $5,000 gap.
Understanding the differences between uninsured vs. underinsured is one thing, but learning their legal implications is another. Motorists should familiarize themselves with the limitations of each coverage:
Uninsured/underinsured motorist bodily injury (UMBI/UIMBI) coverage covers first-party liabilities stemming from injuries and death. It extends to you, your helpers, and passengers. This coverage will pay for medical bills, final expenses, income loss, and lost wages, depending on your policy limits.
Again, you can only file a claim if the at-fault driver does not have adequate insurance. Also, insurers have to identify the driver and vehicle involved before approving your claim.
Uninsured/underinsured motorist property damage (UMPD/UIMPD) coverage pays for first-party property damage. You can file a claim if the at-fault driver has no liability coverage. This coverage helps pay for various vehicular repairs, but you might have to shoulder up to $300 worth of deductible. Also, the insurer has to identify the at-fault driver before approving claims.
What’s the difference between uninsured and underinsured motorist coverage? Don’t worry if you still find some areas unclear. To help you better understand uninsured and underinsured motorist coverage, below are some questions new drivers commonly ask.
In auto insurance, liability coverage covers third-party property damages and bodily injuries arising from road accidents where the policyholder is at fault. Most states require truckers to carry at least $750,000 worth of liability insurance.
Collision insurance helps pay for first-party vehicular damages stemming from collision accidents. Most states don’t require this coverage. However, lenders will require collision insurance before approving auto or truck loans.
Bodily injury liability insurance covers third-party liabilities. Motorists can file claims to pay the medical bills, final expenses, and income loss of injured individuals in another vehicle during road accidents.
Overall, underinsured and uninsured motorist coverage protects you and your truckers from motorists who don’t carry adequate insurance. Not all states require these coverages. However, having them in place benefits those facing high risks of getting into vehicular accidents with delinquent drivers.
Also, don’t worry about the added costs. Contrary to popular belief, getting underinsured and uninsured motorist insurance costs less than adding extra liability coverage to your policy. Most truckers only pay $10 to $15 monthly. Considering that truck accident damages cost upward of $15,000, shelling out an extra $150 per annum doesn’t seem like a bad deal.
Do you still find yourself lost on how to insure your fleet of trucks? Let Assured Standard shed some light on the topic! Check out our in-depth guide explaining everything truckers need to know about commercial trucking insurance.