Uninsured and Underinsured Motorist Coverage

Over the past decade, survey has shown that somewhere around 14% of motorists are not covered by any vehicular insurance policy. This is why uninsured coverage's have been more common than its underinsured counterpart. The reason behind this is mostly because of the state or country's mandatory law of purchasing uninsured coverage's to avoid meeting a problem of rise in traffic claims from motorists without the regular car insurance.

Similarities in Coverage

Uninsured and underinsured motorist coverage mostly have similarities in that both comes in to compensate for any expenses in situations where one is insured properly while the other either does not have insurance or has one with very low or insufficient coverage. Both of these types of coverage were created to avoid filing court claims and the shouldering of high medical expenses by motorists. However, uninsured is usualy mandatory, as previously mentioned. This was a way that the state legislators used to ensure vehicle and other road damage will be paid by the uninsured policy holder.

Even if a driver has auto insurance already, he or she may still choose to purchase an underinsured coverage and add it to the premium. This type of coverage can be added to any type of existing auto policy, whether it be collision, comprehensive, liability or full coverage policy.

On the other hand, underinsured motor coverage is helpful in situation when the party involved in the incident that caused damage holds an insurance policy which will be unable to compensate for all of the damages incurred. The purchase for underinsured motorist coverage is rising as well in terms of purchases. This can be explained by the fact that most drivers though an insurance holder have only a basic liability policy that normally provides premiums less than the amount of damage created in a road collision.

Differences in Coverage

A significant difference that motorists should understand is that uninsured motorist coverage will not be able to cover for medical expenses or work related charges such as lost wages whereas underinsured motorist coverage will. This is in the condition that the holder of the policy is not the proven one to be in fault of the accident.

Drivers should remember that uninsured motorist coverage will cover personal injuries, punitive damages and hit and run accidents but will vary accordingly especially on where it has been bought from or what law the state enforced regarding it. On the other hand, underinsured motorist coverage will handle personal injuries and punitive damages as well but not hit and run accidents. However, a bonus is that property damages are guaranteed to be under the underinsured motorist coverage. This means that it will compensate for damage to properties involved in the accident caused the policy holder which are not covered by the held insurance policy.

The usual amount for an uninsured motorist policy issued by most insurance companies is an average of $30,000 per person or twice the amount per aggregate. The range for underinsured more widely but is usually less than that of an uninsured motorist coverage. Both are suitable solutions when one does not want to purchase or spend too much for health or auto insurance. Payment will be decided afterwards the amount has been released by the policyholder's insurance company which can be then repaid afterwards.