When money’s tight, some people cut back on their car insurance, opting for minimum coverage. The result is often being underinsured, and that can mean trouble for you. If you’re involved in an accident caused by an underinsured driver, your vehicle damage or medical expenses might not be covered. That’s why underinsured motorist coverage from Nationwide is so important.
Underinsured motorist coverage includes 2 types of coverage
Underinsured motorist insurance can protect you in two ways. Underinsured motorist property damage coverage may pay for damage to your car or other property, such as a fence or mailbox, in a covered incident that exceeds the limits of the underinsured driver’s policy.
Underinsured motorist bodily injury coverage may pay for you and your passengers’ lost wages, medical expenses and other expenses that exceed the limits of the underinsured driver’s policy in a covered incident.
Typically, underinsured motorist coverage is sold in some combination with uninsured motorist coverage, depending on the state where you live.
How underinsured motorist insurance works for property damage
An underinsured driver is someone who has purchased enough auto liability insurance to meet state minimum limits, but not enough to pay for any substantial damage (that exceeds their minimum) they cause to another driver.
Let’s say your car is damaged in an accident. The bill for repairs cost $15,000.
If the driver who caused the accident carries only a state minimum limit of $5,000 for property damage liability, you would have to pay for the remaining $10,000 to repair your vehicle. Underinsured motorist insurance would help pay for that expense in a covered incident.
How underinsured motorist insurance coverage works for injuries
If you’re badly injured in an accident caused by an underinsured driver, you would have extra protection with this coverage. Suppose you are hit by an underinsured driver carrying state-minimum bodily injury liability insurance in that state ($15,000 per person and $30,000 total per accident). If your medical expenses exceed $125,000 and you have no health insurance, you could be in serious financial risk. Underinsured motorist coverage would help pay some of those expenses in a covered incident.
Underinsured motorist coverage is required in just a few states – and recommended everywhere
Some states require you to purchase this coverage in some form, while it is simply advisable in other states.