Uninsured or Underinsured Motorist Coverage

Check Your Auto Coverage… You Probably Do Not Have Enough

Uninsured or Underinsured Motorist Coverage

A common situation that occurs in my practice is where a client is injured in a car accident and the other driver either a) does not have any car insurance or b) does not have enough insurance. The significance of uninsured or underinsured motorist coverage can be catastrophic. Imagine the scenario where you face a Mt. Everest amount of medical bills, are unable to work for several months, not even taking into account your pain and suffering and inability to enjoy the normal activities and hobbies because of your injury. Fortunately, all is not lost under such a scenario, albeit with one very important caveat. 

Uninsured and underinsured motorist coverage is one of the most misunderstood and most underutilized coverages.  Uninsured coverage covers you when the other driver has no insurance. Underinsured motorist coverage fills the gap where the other driver had coverage, but not enough to compensate you for your injuries. You should never waive underinsured motorist coverage and simply choose a liability only policy.  But simply having underinsured coverage is not enough. You need to have the right amount of coverage. 

The minimum amount of coverage to allow you to legally drive in Illinois is $25,000 per person/$50,000 per accident. Your underinsured coverage should not be the minimum since it is offset by whatever you receive from the at-fault driver’s insurance. Put another way, if you receive $25,000 or more from the at-fault driver’s insurance and only have coverage of $25,000 yourself, you cannotproceed with an underinsured motorist claim. Your insurance must exceed the coverage of the liable driver. From there, the policy limits go to $50,000/$100,000, $250,000/$500,000, $500,000/$1,000,000. How much should you get? As much as you can afford. The difference in price between a $25,000/$50,000 policy and a $500,000/$1,000,000 policy is not usually very significant. More importantly, it protects you from that situation discussed above. Imagine you have $200,000 in medical bills, significant lost wages, and you were just hit by someone with $25,000 in coverage or, worse yet, none at all. 

Another common question asked is whether accessing the uninsured/underinsured coverage will raise a client’s rates. The answer is it should not. However, insurance companies routinely find ways to raise insurance rates. Like death and taxes, insurance rates can be counted on to typically increase. However, if you pay to have the coverage and never use it, you have just given a substantial windfall to your insurance company. 

The hope is that you will never be in a situation where uninsured or underinsured motorist coverage is necessary. But all hopes aside, you cannot take the risk of someone seriously injuring you and not being able to cover your medical bills, lost wages, and all of the pain you suffer as a result of their negligence. Talk to your insurance agent and see how much coverage you can afford. If you are with an insurance company that does not offer more than the minimum coverage, consider switching. These companies are the bottom of the barrel. Finally, if you have any questions about uninsured or underinsured motorist coverage or about a car accident in general, make sure to speak with a car accident attorney. Please contact us today with questions or concerns.