What Is Underinsured Motorist Coverage?

As a vehicle owner, you’ll want to take appropriate steps to protect your investment and financial interests. You also likely understand that auto insurance plays an essential role in this goal, potentially ensuring you can manage the monetary ramifications of accidents, criminal acts and other incidents involving your vehicle. Unfortunately, other parties may not be so responsible, making underinsured motorist coverage advisable.

How Does This Coverage Work?

In most cases, motorists must adhere to certain requirements regarding auto insurance or proof of financial responsibility while driving on public roads. These mandates ensure that if you’re at fault for an accident in which other parties accrue losses, such as bodily injuries or property damage, they can receive compensation. However, the minimum amounts of coverage other motorists may be required to retain might not always be enough to pay for the full extent of your losses.

Consider situations where the responsible party does not have enough insurance to fully compensate you for damage they caused. Underinsured motorist (UIM) coverage can offset this disparity and pay out additional aid in these cases.

Is It Required?

While some states require drivers to carry UIM coverage, many do not. For example, in Alabama, you’re not required to include this protection in your policy. However, all auto insurance companies must at least offer underinsured motorist coverage. If you want to decline this part of a policy, you’ll need to provide written confirmation that you’re choosing to opt out.

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Contact SOS Insurance Agency today to learn about underinsured motorist coverage and other auto insurance options or get a free quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.