Pros and Cons to Underinsured Motorist Coverage

January 27, 2012

America's driving population has a range of attitudes about buying underinsured motorist coverage for their auto insurance policies. Here are some of the points made about this unique type of coverage that essentially pays out on claims where the driver at fault does not have enough insurance to cover the damage that was done.

  • Underinsured motorist coverage is an extra cost - cost for insurance "riders" or extra coverage such as underinsured motorist coverage tend to pad policies and put premiums up. That's why many drivers take their chances with lower-cost policies that cover less.
  • An insured driver may have to go through the courts anyway - although the idea of on insured and underinsured motorist coverage is to keep collision claims out of the courts, statistics suggest that there are still a high number of drivers working their cases through the court system. For one reason or another, underinsured motorist coverage may not apply to claim or cover the entire amount.
  • Drivers can "hedge" their liability against collision risk - on the plus side, underinsured motorist coverage often does what it was intended to do. This coverage bridges the gap between what the at fault driver's policy will pay out in terms of basic liability, and the rest of the cost of a vehicle or other costs such as medical bills.

Think about these basic points when you're making the decision whether or not to put underinsured motorist coverage on the roster in talks with your auto insurance representatives that will determine how you are covered for your future on the road.


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