The Benefits of Underinsured/Uninsured Insurance (UM/UIM) Coverage

March 24, 2011

In my previous article Full Tort vs. Limited Tort, is it worth the extra money?, I discuss the differences between full tort and limited tort coverage. The world of automobile insurance coverage can be complex and many times confusing. In this article I wanted to talk about another aspect of automobile insurance coverage which, is the importance of and the difference between, uninsured motorists (UM) benefits and underinsured motorists (UIM) benefits.

What is Uninsured Coverage?

Uninsured benefits are similar to underinsured, in that it allows you to recover from your own insurer in a case where the driver at fault for the accident did not carry any insurance coverage. When purchasing an automobile policy, it is easy to assume that every driver out there both has insurance and has sufficient coverage because the law requires everyone to have automobile insurance. However, the reality is that many drivers are not even covered by automobile insurance and many that are covered have the minimum coverage allowed by the law, which in many cases, especially where there has been a serious accident, will not even begin to compensate a victim for his or her injuries, lost wages and other damages.

What is Underinsured Motorist Coverage?

Underinsured coverage is an addition to your policy which you elect to carry, which would allow you to recover from your own insurance company in the event of an automobile accident where the other driver, if at fault, does not have enough automobile insurance coverage to compensate you for your damages. In other words, underinsured benefits kick in when the driver at fault simply doesn’t have enough liability coverage to appropriately compensate you.  

What do you need to know about UM /UIM coverage?

Pennsylvania does not require that motorists carry UM or UIM coverage. However, they do require that insurance providers at least offer such coverage on all of their policies. In order to opt not to have the coverage, the policy holder has to sign a waiver acknowledging that they were offered the coverage and are denying to purchase it.

What should you do now that you understand the UM/UIM coverage?

Review your policy or call your insurance agent and determine whether or not you are currently covered for underinsured or uninsured motorists benefits. If you are, make sure that the limits of the coverage are sufficient to compensate you should you be involved in an accident with an uninsured or underinsured driver. If you do not have the coverage, many policies provide them at a relatively minimal cost, and you should contact your insurance provider and discuss your options for obtaining UM/UIM coverage.

After all, you purchase automobile insurance to cover someone else in the event of an accident, why shouldn’t you have coverage for yourself as well?