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Underinsured Motorist Coverage

Underinsured motorist coverage refers to a kind of an auto insurance that helps cover costs if the other party in a motor vehicle collision is underinsured. As a rule, this coverage comes into play to cover collision repair costs, as well as costs for injury treatment if an insured driver or any passenger was injured in a vehicle crash. The underinsured motorist coverage may vary and if the injuries and damage fall below the coverage limits, the underinsured motorist coverage of the second party would pay for the rest. 

Underinsured coverage differs from uninsured coverage, which steps in when there is an accident with a driver who doesn't have insurance. Some states claim that drivers need to purchase at least underinsured motorist coverage, while in others uninsured motorist coverage is mandatory. 

Underinsured Motorist Coverage explained

When an individual is involved in a car crash, in which the other driver is at fault and his insurance is insufficient to pay the claim, we can talk about the underinsured coverage. If the injured driver contacts his insurance company, it will notify the other driver’s insurance company of the accident and file the claim with them by providing the car accident report. If the at-fault party is underinsured and can’t pay for expenses, the losses could be covered by the underinsured motorist coverage, according to the limit of the policy. 

For instance, a driver should pay for medical bills and they total $100,000. The second party is underinsured and can pay back only $50,000. The driver can claim the rest against the insurance company, considering the policy limit. 

Some insurance companies set limits on how long after an accident you can claim compensation on your underinsured motorist coverage. It is different in all companies and may last only 30 days. When the insurance provider is ready to pay money to a policyholder for the occurrence of a loss, it requires such documents as copies of your medical records and billing records and vehicle repair bills. 

The driver should keep in mind that the company can legally refuse to pay a claim if there are indirect costs. If the provider denies the claim, he has the right to appeal the decision. 

Advantages of obtaining Underinsured Motorist Coverage

Underinsured motorist coverage can be a solution to many problems of a driver if he pays a little extra premium amount. However, it can be very useful and give additional policy coverage in case he ends up in a car crash with an at-fault underinsured party. According to a study, about one in eight drivers on the road was uninsured. That’s why it’s beneficial enough for a driver.

Each state has a minimum car insurance coverage amount required for drivers and this may be the case when the at-fault party went only for this one. 

Nevertheless, all motorists must be able to prove financial responsibility in the event of an accident, according to the U.S. law. 

Сompanies sell various kinds of underinsured motorist coverage. Some of them cover only injuries that occurred in an accident, while with others you can claim compensation for vehicle damage. 

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