The first question that will be asked regarding underinsured motorist coverage is simply, “What is underinsured motorist coverage and why do I need it?” Underinsured motorist coverage differs from uninsured motorist coverage as it requires that the responsible party actually have insurance.
Many states only require that a very low amount of coverage be carried for third party damages, sometimes as low at $5,000. With the current cost of automotive repairs and medical bills, it does not take a very significant accident to exceed $5,000. Underinsured motorist coverage provides coverage if the driver who was responsible for damage or injury does have insurance, but
Their limits are below the state minimums; or
Their limits are not sufficient to coverage all of the damage to your vehicle caused in the accident; and
You or your passengers are injured in the accident; or
The vehicle you own and insure is damaged in the loss.
There are also some state specifics that should be noted regarding underinsured motorist coverage.
The following states require this coverage:
There are other states in which the coverage is limited to either Property Damage or Bodily Injury only. States can also limit the amount of underinsured coverage that you can carry on your policy. Please refer to your state Department of Insurance for further information. You can also contact your agent or insurance carrier directly for details on what your state requires, allows and prohibits.
Some states will also allow “stacking.” Stacking is when you can take the limits for coverage held by the responsible party and add those to your underinsured motorist coverage to provide more coverage for your damages.
Now that you know why it is important to have underinsured motorist coverage, how can you get it? The first step is to obtain a quote from your insurance carrier. Quotes should always be provided free of charge. There are three ways to get your quote.
Contact your agent. Your agent is usually located in the neighborhood and you will call to set up a time to discuss a quote. The agent will sit down with you, review your coverage needs and give you a quote.
Call the insurance carrier directly. If you review your current policy, the Declarations Page will list a phone number for policy services. Give that number a call and talk to the representative about the coverage you wish to add.
Over the Internet. Most carriers will now offer quotes directly over the internet. Go to the company website and navigate to “Get A Quote.” You will either be given an instant quote or receive an email a few days later with your quote. Some carriers will also refer your request to a local agent to quote your changes.
Most carriers will not write underinsured motorist coverage as a stand-alone option. You will need to have your entire automobile policy written with that carrier in order to get the underinsured motorist coverage. Once you have received your quotes, review the limits and make sure that they fit your needs. If you have any questions, be sure to ask prior to signing the insurance contract.