Uninsured coverage and underinsured motorist coverage are categorized under the Optional Insurance Coverage. It is always advised to have them in your own interest. Auto insurance is mandatory in most of the states in the US. Certain minimum liability auto insurance is compulsory to drive in these states. But there are several types of coverage and some are required by the law and others are not. It depends on the type of car that you own, its age, condition and model etc. Your insurance agent will be able to guide you to decide the coverage you should buy and which you need not based on your needs and circumstances.
Many people do not realize the importance of UM and UIM coverage until they find themselves in a situation from when they understand the benefit of carrying UM and UIM. Let us look at two of these situations here to understand how you benefit from UM and UIM auto insurance coverage.
When you are hit by a driver and get bodily injuries and your car is also damaged. The other driver does not have car insurance at all. In this situation you will be paying for all the expenses without the help of an insurance company. But if you had purchased uninsured motorist coverage as part of your auto insurance, your insurance company will pay for the above expenses to the limit of your policy. The uninsured motorist coverage is designed exactly to cover this loss. You have purchased it with your money to meet the expenses arising out of this situation. You own uninsured motorist policy will pay for your medical expenses when you get injured when you travel in a car as a passenger and hit by an uninsured driver and the car in which you travel does not have insurance or it has inadequate cover.
If you are hit and injured by an under insured driver, the underinsured driver’s policy will come into effect first. If your medical bills exceed the amount of his policy, then your own underinsured motorist insurance will pay for the remaining amount.