Get The Basics Of Underinsured Motorist Coverage

When money's tight, some people cut back on their car insurance, opting for minimum coverage. The result is often being underinsured and that can mean trouble for you. If you are involved in an accident caused by an under-insured driver, your vehicle damage or medical expenses might not be covered. That is why under-insured motorist coverage from Nationwide is so important.

Under-insured motorist coverage includes two types of coverage

Under-insured motorist insurance can protect you in two ways. Under-insured motorist damage coverage may pay for damage to your car or other property, such as a fence or mailbox, in a covered that exceeds the limits of the underinsured driver's policy. Under-insured motorist bodily injuri coverage may pay for you and your passengers' lost wages, medical expenses and other expenses that exceed the limits of the underinsured driver's policy in a covered incident. Typically, under-insured motorist coverage is sold in some combination with uninsured motorist coverage, depensing on the state where you live.

How under-insured motorist insurance works for property damage

An underinsured driver is someone who has purchased enough auto liability insurance to meet state minimum limits, but not enough to pay for any substantial damage (that exceeds their minimum) they cause to another driver. Let's say your car is damaged in an accident. The bill for repairs cost $15,000. If the driver who caused the accident carries only a state minimum limit of $5,000 for property damage liability, you would have to pay for the remaining $10,000 to repair your vehicle. Underinsured would help pay for that expenses in a covered incident.

How under-insured motorist insurance coverage works for injuries

If you are badly injured caused by an under-insured driver, you would have extra protection with this coverage. Suppose you are hit by an under-insured driver carrying state minimum bodily injury liability insurance in that state ($15,000 per person and $30,000 total per accident). If your medical expenses exceed $125,000 and you have no health insurance, you could be in serious financial risk. Under-insured motorist coverage would help pay some of those expenses in a coverage incident. more info