The importance of having uninsured and underinsured (UM/UIM) coverage on your auto policy cannot be stressed enough. Having this type of coverage is the best way to protect yourself in the event you are injured in an accident caused by a driver who either does not have insurance or does not have enough insurance to cover your damages. For example, if an insured driver caused damages to you of $125,000 and he had limits of only $25,000, then you could recover the other $100,000 from your own company so long as your own underinsured coverage limit was at least $100,000. If your underinsured limit was less than $100,000, say $50,000, then you would only be able to recover an additional $50,000 above what the other driver’s insurer paid you. Similarly, if the at fault driver had no insurance at all, then you could recover $125,000 from your own company so long your own uninsured coverage limit was at least $125,000.
A lot of people resist adding UM/UIM coverage to their policy, or only add the minimum $25,000, because they think it will cost too much. However, the majority of the cost of UM/UIM insurance is built into the first $25,000 of coverage and it costs very little to increase your UM/UIM coverage to $100,000 or more. In fact, many insurers will include UM/UIM coverage in umbrella policies providing a $1,000,000 in coverage for a small additional premium.
The concept of stacking is another factor to keep in mind when making a UM or UIM claim. Stacking allows you to stack the UM/UIM limits of various policies covering you so as to provide you with more compensation for the damages an uninsured or underinsured driver caused you. For instance, suppose you are a passenger in a friend’s car and are hit by an uninsured or underinsured driver and suppose you have $50,000 UM coverage and your friend has $50,000, you are able to stack those policies so that you have $100,000 in UM/UIM coverage. Then if you lived with someone who had $100,000 in UM/UIM coverage on their own car, you might be able to stack that on as well, so that you would then have $200,000 in UM/UIM coverage. You can even stack where you have insurance covering multiple vehicles you, your spouse, and resident child own so long as they are each insured under a separate policy. Many times you can even stack where you are not listed as an insured under the policy. Also, remember that if you have an umbrella policy with UM/UIM coverage, you can stack that onto your auto policy’s UM/UIM coverage.
You can add this type of coverage to your policy at any time, so don’t wait until your next policy renewal, protect yourself today!