Underinsured/uninsured motorist coverage is one of the most frequently misunderstood policies available to drivers. However, most drivers can benefit from purchasing this type of coverage. Read on to learn how this coverage works and how it can help you.
Defining Uninsured/Underinsured Motorist Coverage
When you first hear the term “uninsured/underinsured motorist coverage,” you may think you are buying this type of coverage for the benefit of other drivers on the road. However; this is a common misconception. In reality, uninsured/underinsured motorist coverage is actually designed to protect you from other drivers who may not have purchased enough insurance on their own.
How Does It Work?
In most cases, victims in an auto accident are compensated by the at-fault driver’s insurance company. Specifically, when a driver causes you injury and/or property damage in an accident, his or her auto liability insurance will pay your related expenses. However, in cases where the driver has no auto liability insurance or has a policy with limits lower than your total expenses, you may not receive the full amount you are owed.
In these cases, uninsured/underinsured motorist coverage will step in and make up for the amount the at-fault driver is unable to pay, up to your policy limit. If your injuries and/or the extent of the property damage is severe, this can mean the difference between financial ruin and getting on with your life. If you don’t have this type of coverage, your only option is to try to collect from the at-fault driver, which is rarely successful when the individual is uninsured.
Do I Need This Coverage?
The state of Indiana does not require you to purchase uninsured/underinsured motorist coverage by law. However, that does not mean that you should not purchase this type of policy. Having uninsured/underinsured motorist coverage prevents you from dealing with financial problems in the event of an accident involving a person with limited or nonexistent insurance coverage. It also provides you with peace of mind, which can be invaluable.
How Much Should I Purchase?
If you decide to purchase uninsured/underinsured coverage to protect yourself, you will have to decide how much coverage you want to buy. Generally, there will be three different coverage limits associated with these policies. The first limit tells you the limit on bodily injury coverage for a single person in any one accident. The second limit tells you the limit on bodily injury coverage for all people in any one accident. The third limit is the limit on property damage coverage.
When trying to decide how much coverage to purchase, there are several factors to consider. Purchasing a greater amount of coverage will lead to more security, but a higher premium. For this reason, it helps to talk to an experienced insurance agent who can give you customized advice.
If you are interested in purchasing uninsured/underinsured coverage, please contact the team at Luxor Insurance today. With our help, you can find a policy that meets your needs and fits well within your budget.