Does your car insurance cover this? A driver plows into the back of your car and you end up in the hospital. Your medical bills are almost $70,000 but the driver who hit you only has $25,000 bodily injury coverage. What can you do?
Of course you can always take the driver to court to pay the rest of the damages. However, this could take months or years and you may end up with nothing if that person has no money or assets to forfeit.
However if you're carrying Uninsured Motorist and Underinsured Motorist (UM/UIM) coverage on your car insurance policy, you may be able to get some or all of those bills paid.
Uninsured Motorist coverage pays for injury and damages caused by an uninsured driver or hit and run driver. Surprisingly -- or not so surprisingly -- there are many people out driving around without car insurance. Adding this to your policy can be an important financial safeguard for you.
Underinsured Motorist coverage pays the difference between an at-fault driver's liability limits of coverage and the actual costs of the injury or damage -- up to the limits you set when you add UIM to your policy. Many people are driving around with just the minimum state-required limits of liability on their car insurance. Adding this coverage can also help protect your finances.
Whether you get UM or UIM coverage depends on a few things. For one, it may be mandatory in your state. For another, consider your situation and your other insurance such as health coverage. You may want the extra coverage for peace of mind. Also, what's the region like where you live? Arizona for example has a high proportion of uninsured motorists and hit-and-run incidents.
When you're shopping for car insurance and you want to make sure you're getting the best rates on UM/UIM, get at least three different quotes. Just make sure to use the same limits for UM/UIM for each quote to get an accurate comparison.