What Is Underinsured and Uninsured Motorist Coverage?
Underinsured motorist coverage and uninsured motorist coverage are used when a driver at fault in an accident does not have enough liability coverage or any liability coverage to cover expenses for property damage or bodily injury. These coverages are intended to prevent individuals from paying out of pocket for vehicular accidents that they were not responsible for causing. While most states require drivers to carry uninsured and underinsured motorist coverage, Virginia allows drivers to drive without insurance if they can prove their ability to pay for losses from an accident out of pocket. However, if a Virginian driver purchases auto insurance, they are required to have underinsured motorist coverage as well as both property damage and bodily injury uninsured motorist coverage. The legally required minimum uninsured/underinsured motorist coverage in Virginia is 25/50/20. This is interpreted as $25,000 for bodily injury per person involved in a collision; $50,000 for bodily injury per accident; and $20,000 for property damage per accident.
Liability coverage, like underinsured/uninsured motorist coverage, is typically required by law in Virginia. Liability covers bodily injuries and property damage of the party you harmed in a vehicular collision. This liability coverage does NOT pay for the at-fault driver’s injuries or property; additional coverage would need to be bought to cover those expenses. The minimum liability coverage is 30/60/20.
How Does Underinsured and Uninsured Motorist Coverage Work?
After an individual is involved in a car accident that they did not cause, they will file a claim with the car insurance company of the party at fault. The at-fault driver’s insurance will cover the expenses to repair the vehicle, acquire medical care, and any wages that were lost during medical leave.
However, if the at-fault driver does not have enough car insurance or any car insurance, the affected party’s underinsured motorist coverage will help them pay their expenses. Underinsured coverage, as defined by Allstate, compensates for an underinsured driver who may have auto liability insurance but has “insufficient liability limits to cover your bills after an accident” or “liability limits less than or equal to your underinsured motorist coverage limit.” For example, if the at-fault driver has an auto insurance policy of $200,000 but caused an accident worth $400,000 in damages, the affected individual with underinsured insurance of at least $200,000 can file a claim for the difference.
What Are the Types of Uninsured and Underinsured Motorist Coverage?
Uninsured and underinsured motorist coverage includes two types known as bodily injury (UMBI/UIMBI) and property damage (UMPD/UIMPD).
Uninsured/underinsured motorist bodily injury coverage covers expenses for the driver and passengers related to medical bills, lost wages during medical leave, and “pain and suffering” in an accident caused by an individual with insufficient motor insurance.
Uninsured/underinsured motorist property damage coverage covers expenses related to the vehicle that was hit by an individual with insufficient motor insurance. For instance, in an accident with significant damage caused by a driver with low auto insurance limits, uninsured or underinsured coverage can cover remaining repair expenses, a collision deductible, and other out-of-pocket expenses.
