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Underinsured Motorist’s Coverage & Compensation

Just as uninsured motorist’s coverage protects drivers in situations where an at fault driver may not have any insurance to cover a collision, underinsured motorists’ coverage (UIM) also protects drivers (in a slightly different manner).

Underinsured motorist’s coverage protects drivers after a collision, where the at fault driver does have liability insurance, just not enough of it to cover all of the injuries. Normally the at fault driver’s insurance covers any bodily injuries sustained in a crash.  In some cases, though, the coverage held by the at fault driver is not enough to compensate the injured party or parties. That is where UIM comes in.

For example if the at fault driver carries the minimum limits of $25,000/$50,000 with Insurance Company A, and the driver is seriously injured and has to have shoulder surgery, then those limits will not be enough to compensate that injured driver. If the driver of the vehicle that was not at fault carries limits of $100,000/$300,000, then a UIM claim would be made with the injured parties own insurance, Insurance Company B. Assuming Insurance Company A does not dispute liability and tenders the limits to the injured party, then Insurance Company B would be secondary insurance coverage. In this example, if the $25,000 limits were paid out, then the injured driver would be able to claim up to $75,000 in coverage under the UIM claim. Assuming there were two seriously injured parties and the $50,000 limits were paid, then there would be a balance of up to $250,000 in UIM coverage.

It is very important that policyholders have enough UIM coverage in the event there is just not enough insurance to compensate them should there be a collision and the at fault driver has minimum limits. It is also very important that should you be injured in a collision, that you contact an experienced attorney who will make sure all avenues of recovery are explored, and that all necessary insurance companies are timely notified. If you have questions, please contact Dolan Law for more information.

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