Being in an auto accident can be a traumatic and life changing experience. What makes things worse is when an at-fault party doesn’t have insurance, or only has minimal insurance coverage that doesn’t fully compensate you or your loved ones for their injuries. That’s why it is important that your auto insurance policy contains both uninsured insurance coverage and underinsured insurance coverage.
Underinsured auto insurance coverage protects you when an at-fault party does not have enough insurance money to fully compensate an injured party for their loss. For Example, let’s say a person named John was in auto accident that was not John’s fault. As a result of the accident, John’s medical bills were $30,000.00 (thirty thousand dollars). The person that caused the wreck only his $25,000.00 (twenty five thousand dollars) in insurance coverage to compensate John for his injuries. This is a classic case of when underinsured auto insurance coverage can help John. The at fault party's available insurance coverage is simply not enough to cover John’s losses as a result of the wreck. If John has underinsured auto insurance coverage under his own insurance policy, John can seek that additional coverage from his insurance company to make him whole, and to fully compensate him for his loss. Without this underinsured coverage, John can be stuck paying for his medical bills for years for a wreck that wasn’t even his fault.
John’s example can also be used to explain uninsured auto insurance coverage. The only change is that the at-fault driver who hit John does not have any insurance. In that case, if John doesn’t have uninsured auto insurance coverage under his auto insurance policy, he can once again be paying for medical bills and other related expenses for a wreck that was never his fault in the first place.
If you have questions about your auto insurance policy, and whether you have uninsured and underinsured auto insurance coverage, we encourage you to bring it in and let us have a look at it for free. We will answer your questions to ensure you are better protected.