What is Uninsured and Underinsured Motorist Coverage?
Posted on Wed, Sep 01, 2010
In Massachusetts, you are required to carry uninsured motorist coverage however, underinsured motorist coverage is optional. It’s important to understand the differences between the two and why you should consider increasing your limits.
What is uninsured motorist coverage?
Uninsured motorist coverage can pay medical expenses and lost wages in the event that you are injured in an auto accident in which the driver of the other car is at fault and has no insurance (including hit and run accidents). Although Massachusetts is a mandatory insurance state, there are many uninsured vehicles on our roads. The majority of these vehicle owners have no insurance due to non payment and they continue to drive because either they feel they have to or because they did not realize their coverage had been cancelled. Other uninsured vehicles are from states which do not require insurance and the car owners have opted not to purchase insurance.
Why do I need increased limits of uninsured coverage?
- If you are injured in an accident in which the other driver is at fault (including hit and run accidents) and you cannot work for 6-12 months, it would be helpful to collect some money from your insurance carrier.
- If you or a family member suffered injuries after being hit by an uninsured car while walking on the road or while riding a bicycle, it would be helpful to collect some money from your own insurance carrier.
Why might I not need increased limits of uninsured coverage?
The best argument for not purchasing additional coverage would be if you and your family members had a strong disability income policy in force. In effect, uninsured motorist coverage acts like disability insurance and as a result additional coverage may not be necessary.
What is underinsured coverage?
Underinsured motorist coverage will pay for medical bills and lost wages if you are injured in auto accident and the at-fault driver has little insurance. Your policy will pay you for any damages above the amount of bodily injury coverage carried by the at fault driver up as high as the limit of underinsured coverage you purchase. For example: the at fault driver has a $20,000 per person limit of bodily injury, you carry $100,000 per person of underinsured coverage and your injuries and lost wages amount to $40,000. The other drivers insurance would pay you $20,000 and your own policy would pay you $20,000 for a total of $40,000.
Why do I need underinsured coverage?
- Many people have bodily limits of $20,000 per person and $40,000 per accident. The $40,000 per accident limit may need to be shared by 3 or 4 people . Is $10,000 or even $20,000 enough for you to survive if you are out of work for 6 months to a year? How about two years?
- You have children that are driving in other people’s cars or perhaps teenagers or young adults who are driving in a friend’s cars. If your child is injured in a car accident in which the driver is at fault and does not have high enough insurance limits to pay for the injuries and damages to all of the injured people in the car.
- If you were running, walking or riding a bike on the street and were hit by a car whose owner had very little insurance, this coverage would cover you.
Why might I not need underinsured coverage?
Again, a strong disability income policy may be a good reason not to carry high limits of coverage as long as all of your household members are insured.
As a family with multiple vehicles, can we increase the uninsured/underinsured limits on just one of the vehicles?
The answer is yes if you or your family members are injured in accident and the other party is found to be at-fault but, only if you are driving the vehicle with the increased limits or are in someone else’s car or as a pedestrian. However, you cannot rely on the higher limit coverage if you were driving the car with the lower limits during the accident.