Most people do not understand it and fail to appreciate its importance to them and their family. Underinsured motorist’s coverage insures you and your resident family members if you or they are injured in a motor vehicle collision and the other driver does not have sufficient liability coverage to adequately compensate you for your injuries – medical bills, wage loss, physical disability, and pain and suffering. Uninsured coverage protects you and your resident family members from situations where you are injured by another driver who does not have any liability coverage on his or her automobile.
Unfortunately, in this day and age a surprising number of people do not carry any insurance or only carry the statutory minimum. Under Minnesota law, that statutory minimum is $30,000.00 for liability coverage and $25,000.00 for underinsured and uninsured coverage. It doesn’t take much for an injury to create damages that far exceed these minimal coverages.
You should look at your policy to see what type of coverage you currently have to determine if you believe the coverage you are carrying is adequate. If you are not sure what amount of coverage you should carry, you can always consult with your insurance agent and/or also talk to your attorney. Obviously, any decision on the amount of coverage you decide to carry will have to factor in what you can afford. Fortunately, underinsured and uninsured coverage is relatively inexpensive when compared to other types of coverage. Often you can purchase the same amount of underinsured and uninsured coverage for a one/third or one/forth of what you pay for an equivalent amount of liability coverage. A rule of thumb is to carry as much underinsured and uninsured coverage as you do liability coverage.
You might also want to consider purchasing an umbrella policy to add to these various coverages. It is always important to make sure that the umbrella policy you purchase adds additional coverage not only to your liability exposure but also to underinsured and uninsured situations. It seems to us that protecting yourself and your loved ones from the negligence of others should have just as much importance as protecting yourself and your resident loved ones if you are negligent and injure a stranger as you are driving out on the highways. Think about it, it is amazing how often client’s come to us after an accident and we find that the other driver who caused the accident did not have any insurance or had only the statutory minimum of $30,000.00. In those situations our clients often find that they have inadequate underinsured and/or uninsured coverage which would make up the difference in the compensation they are entitled to for their injuries that resulted from a sudden and tragic motor vehicle collision.
Your decision on the amount of coverage you carry is worth your attention.