Having insurance is the law, so if another driver hurts you or your car, they have insurance to pay for it, right? In many cases, the answer is no. Between drivers illegally driving without insurance and those carrying minimum coverage, many accidents have costs that exceed what insurance would cover. Keep reading to learn more about how you can protect yourself.
What Happens if a Driver Doesn’t Have Insurance?
If a driver who doesn’t have insurance causes an accident, there’s a good chance they could go to jail or at least receive a ticket. You might be able to sue them for your losses, or you might be able to obtain restitution as part of their criminal case. However, many drivers who don’t have insurance have low incomes and little to no assets. Even if you get a court judgment saying they owe you money, you may never be able to collect.
What Happens if a Driver is Underinsured?
An underinsured driver is a driver who has a low limit policy. Their insurance company will pay up to the policy limits, but you’d need to find a way to recover any losses above that amount. For example, assume you had $100,000 in medical bills from an accident caused by a driver with the Wisconsin minimum $25,000 in liability coverage. You’d get $25,000 from the insurance company and could sue the driver for the remaining $75,000. However, like uninsured drivers, you may find it difficult or impossible to collect this money, and legal fees may reduce any amount you do recover.
What is Uninsured and Underinsured Motorist Coverage?
Uninsured and underinsured motorist coverage is insurance that you buy to protect yourself from an accident caused by an uninsured or underinsured driver. If the other driver is at-fault and owes you money beyond their insurance policy limits, your UI/UIM coverage will kick in. You’ll receive full compensation up to your own policy limits regardless of whether your insurance company can collect anything from the other driver.
Uninsured and underinsured motorist coverage is typically a combined option with three parts.
- A per person limit for things like hospital bills and lost wages.
- A maximum coverage amount for the entire accident.
- A limit for property damage to your car.
Policy limits are shown in the same way as your own liability limits. For example, a $25,000/$50,000/$10,000 policy is $25,000 per person, $50,000 per incident, and $10,000 in property damage. As with your own liability limits, you can choose UI/UIM limits that match your needs. Typically, the highest you can set your UI/UIM limits is equal to your liability limits.
Ask Your Insurance Agent About This Optional Coverage
Uninsured and underinsured motorist coverage is an optional coverage that many drivers opt out of to reduce costs because they didn’t understand it. To avoid having bills you can’t pay after an accident caused by another driver, ask your insurance agent if adding UI/UIM coverage is right for you. Long & Company can help you find the coverage and limits you need, so give us a call today.