There are distinct differences between underinsured vs. uninsured motorist coverage that you need to be aware of when looking at your insurance policies.
For starters, uninsured coverage would benefit you if you were involved in an accident where the other driver is responsible but doesn’t have insurance. If you sustain injuries along with damage or loss to your vehicle, you can still receive compensation. Therefore, if you elect the uninsured motorist policy, you would have additional protection under such circumstances. However, if you choose to waive that coverage because it’s cheaper, the insurance companies might encourage you to opt for the least expensive policy. That would leave you with no cause of action. Whereas if you have a reasonable amount of uninsured motorist coverage, in the event that the person responsible for the accident doesn’t have any insurance coverage, you still have an avenue of recovery.
Likewise, underinsured motorist coverage is very similar, but again, what if a driver causes an accident and has only a minimum amount of coverage? In Pennsylvania, the minimum amount of coverage required is $15,000, but consider the possibility of the other driver suffering injuries that cost $50,000 or $100,000 or $1 million. Under those circumstances, underinsured motorist coverage would be applied to fill the gap between the driver who has inadequate coverage and the other individual who sustains a significant amount of injuries and/or vehicle damage.
Understanding Underinsured vs. Uninsured Motorist Coverage
When you’re involved in an auto accident, one of the most important factors in recovering financially is the insurance coverage available—both yours and the other driver’s. Unfortunately, not every driver on the road carries sufficient insurance. That’s where Uninsured Motorist and Underinsured Motorist coverage come into play. Though they sound similar, they serve different but equally critical purposes in protecting you after an accident.
Uninsured Motorist (UM) Coverage
Uninsured Motorist coverage protects you if you’re in an accident caused by a driver who doesn’t have any insurance at all. Despite laws requiring liability coverage, many drivers operate vehicles without it. If you’re hit by one of them, you could be stuck paying for your own medical bills, vehicle repairs, and lost wages—unless you have UM coverage.
UM coverage can apply in the following situations:
- Hit-and-run accidents where the at-fault driver cannot be identified
- Accidents with drivers who have no insurance coverage
- Pedestrian accidents caused by uninsured drivers
This coverage steps in to pay for damages that the at-fault uninsured driver would have been responsible for.
Underinsured Motorist (UIM) Coverage
Underinsured Motorist coverage applies when the at-fault driver does have insurance, but their liability limits aren’t high enough to fully cover your losses. For example, if your medical expenses total $100,000, but the at-fault driver only has $25,000 in liability coverage, you may be left with $75,000 in unpaid damages.
UIM coverage helps bridge that gap. After the at-fault driver’s insurance pays out its maximum, your own UIM policy can cover the remaining balance—up to your own policy limits.
Why Both Are Important
Underinsured vs. uninsured coverage are essential safety nets. Medical bills and lost wages can pile up quickly, and relying on the other driver’s insurance—especially when it’s nonexistent or insufficient—is a major financial risk. Adding UM/UIM coverage to your auto policy is a smart and often affordable way to protect yourself and your passengers in the event of a serious accident.
Contact our team at Rosenberg Law to have us review your insurance policies and help you understand all your legal capabilities. Our team is always happy to help you understand more about your coverages.
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