Reader question:
What is uninsured or underinsured motorist coverage?
Benjamin
Good question.
Along with liability coverage, uninsured or underinsured motorist coverage joins the list of insurance coverages that is required in many states. It may seem wrong that it be required to some, because if the need to have car insurance is mandated by law, then why should you have to pay for someone who is breaking the law? However, in some states it was added to the required insurance coverage to lessen the burden on insurance companies and keep them from going under due to too many claims coming to them that should have been covered by the car insurance company of the at fault driver.
Uninsured or underinsured motorist coverage basically protects the car insurance company. When you get into an accident and it is not your fault, you can file a claim with the other driver’s car insurance company to get compensated. But if the other driver is uninsured, or doesn’t have enough insurance to cover your settlement needed, then your own car insurance company kicks in and that is where this coverage comes in.
One of the best perks of this kind of insurance is that, if you get into an accident and have passengers in your car, and some are injured, it pays for their medical expenses as well. It usually pays out a little more than regular health insurance, too, so in the case of an accident you may find it better to rely on this than on your actual health insurance policy.
Cheers,
Fashun Guadarrama.