Uninsured and Underinsured Motorist Coverage: Important Car Insurance No One Has Explained To You

ByDavid Brauns

The following scenario happens every single day at law offices across the United States...

A potential client who has suffered devastating injuries in a car accident and was hospitalized calls an attorney. Her hospital bills alone exceed $45,000. The first question the attorney asks is "How much UM Insurance do you have?" The client almost always responds, "UM, what's that?"

Uninsured or Underinsured Motorist Coverage, or UM for short, is optional insurance that is part of your car insurance policy. It covers you if you or are hit by either an uninsured driver, a hit-and-run driver, or in some cases when the other driver has inadequate insurance to pay for your total loss. UM is essentially insurance against the other driver not having enough insurance. You buy it to protect yourself.

So why don't more people have it?

UM is optional coverage and many insurance companies don't suggest you purchase it. Unlike liability insurance, where they can look at your own driving record to predict your risk, UM is protecting against all the other drivers on the road, something impossible to accurately calculate and therefore price well.

2 Types of UM Insurance

If your insurance company ignoring UM coverage were not enough injustice, there is a rule in some states such as Georgia known called the Reduction Rule. Surprisingly, you may not be entitled to the full amount of your UM - the insurance you have been paying premiums on. The Reduction Rule says you only get the difference between the other driver's liability coverage and your UM coverage. An example is in order.

If you have $100,000 in UM and the other driver has $25,000 in liability coverage, you are only entitled to $75,000 of your UM, not the full amount. This is because your UM coverage is reduced by the other driver's insurance.

Even more unfair is where you have $25,000 of UM and the other driver has $100,000 bodily injury coverage. Here you do not get any of your UM because it's less than the other driver's coverage.

The better type of UM is called Add-On. Add-On is probably what most people think of when assuming how UM insurance works. Add-On coverage takes your coverage amount and adds it on to the at fault driver's insurance policy. This gives you the full value of the insurance you thought you purchased and had been making payments on.

So, the takeaway here is to first understand whether your State uses Reduction or Add-On and then assess how much UM you can afford. At least $100,000 is preferable.

For more information on insurance issues pertaining to personal injury claims, please visit http://AtlantaPersonalInjuryCenter.com. Atlanta Personal Injury Center is a site written by an Alpharetta personal injury attorney that is dedicated to helping everyone understand all the aspects of their personal injury case.

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Insurance: Car-Auto
David Brauns

Email Address:SubscribeCar Auto Article FeedFind More ArticlesSearchSimilar ArticlesUninsured Motorist Coverage - What is it and Why You Must Have ItStacked Versus Unstacked Uninsured Motorist CoverageHave You Had a Run In With An Uninsured Motorist?Uninsured Motorists ExplainedUninsured Motorist Insurance in Florida - Are You Fully Covered?The Uninsured MotoristMaking an Uninsured Motorist ClaimUninsured Motorist ProtectionHow to Guard Against Uninsured MotoristsUninsured Motorist Coverage - Insurance Coverage That Every Driver NeedsRecent ArticlesHow Save Money On Your Auto InsuranceTips on How to Pay for Car InsuranceWhy You Should Own a ConvertibleChoosing a Good Auto Insurance CompanyTips on Getting Auto Insurance Quotes OnlineThe Steps For Filing A Car Insurance ClaimTheft of Personal Property From Car - Does Your Insurance Cover It?Learning From A Vehicle Insurance OverviewHow to Choose the Right Car Insurance PlanWhat Information Do I Need to Compare Car Insurance Online?Submitted On January 12, 2012. Viewed 15 times. Word count: 435.

MLA Style Citation:
Brauns, David".".12 Jan. 2012EzineArticles.com.26 Jan. 2012 .APA Style Citation:
Brauns, D. (2012, January 12). . Retrieved January 26, 2012, from http://ezinearticles.com/?Uninsured-­and-­Underinsured-­Motorist-­Coverage:-­Important-­Car-­Insurance-­No-­One-­Has-­Explained-­To-­You&id=6812885Chicago Style Citation:
Brauns, David "." EzineArticles.com. http://ezinearticles.com/?Uninsured-­and-­Underinsured-­Motorist-­Coverage:-­Important-­Car-­Insurance-­No-­One-­Has-­Explained-­To-­You&id=6812885EzineArticles.com© 2012 EzineArticles.com
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