Uninsured and Underinsured Motorist insurance coverage, also known as “UIM”, is an important optional form of coverage on auto insurance policies. UIM coverage is to protect you in the event that the driver responsible for an accident is not insured or does not have enough insurance. Although auto liability insurance is the law in forty-eight states, there are still many drivers on the roads without insurance. Also, many drivers have only minimum liability insurance polices. This amount of coverage can be quite inadequate in a serious or multiple vehicle accident.
If you purchase UIM coverage, your own insurance own company will pay for the damages caused by an uninsured driver up to the amount of the UIM limits. UIM coverage also pays for drivers that do not have enough insurance to cover all the damages in a serious accident. For example, if a person with $25,000 in liability coverage were to be involved in an accident with bodily injury damages that exceeded $25,000 per person or $50,000 for all persons in the accident, the UIM coverage would pay damages in excess of the liability coverage limits up to the amount of the UIM limits.
With UIM coverage, when you need to make a claim, you are pursuing payment from your own insurance company for an accident caused by another party. This can be of great benefit, as you do not personally have to pursue payment for damages from the responsible driver. In a UIM claim, your own carrier can pursue reimbursement for the UIM payments they have paid directly from the at fault party.
UIM coverage is the law in the states of Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Virginia, West Virginia, Wisconsin, and the District of Columbia. Other states require UIM coverage to be waived in writing by the insured. In the absence of a signed waiver, insurance companies may have to provide UIM coverage in the same amount as the insured’s liability coverage at the time of the accident.
UIM coverage also has other applications. It can apply in bicyclist or pedestrian vs. auto accident. If the driver is at fault but does dot have their insurance coverage, the injured pedestrian or bicyclist may be able to make a UIM claim under their own policy or if a minor under their parents’ UIM coverage to receive payment for injury damages resulting from the accident.
