Are You Properly Protected Against the Uninsured Driver?
The chances of being hit and injured by either an uninsured or an underinsured driver are significant. Either of these situations can create a significant burden for you:
- If the driver is uninsured, this means that any damage to your car and any injuries will not be covered by the liable party.
- If the driver is underinsured, his or her policy may not be sufficient to cover the damage or injury caused to you. This possibility is often overlooked due to the assumption that insured drivers are fully “covered.” However, policies have their limits, most especially when a driver has minimal coverage.
In the event that the driver at fault is totally uninsured, your insurance will cover you if you have the right uninsured coverages in place to protect you. If you have physical damage coverage, this means that your car is covered, thus taking care of the property part of the equation.
Injuries can be devastating; a bad enough injury can potentially put you out of work for the rest of your life. This is why it’s very important to be familiar with your “Uninsured Motorist Bodily Injury” coverage. There are a number of different coverage limits that you can purchase, however the maximum you can purchase is equal to the same amount of liability coverage you purchase. While it’s always a good idea to get the maximum available liability limits, it’s an even better idea to max out on your uninsured motorist limit, because, unlike liability, this covers you by acting as the other party’s insurance in the event that they do not have the coverage.
Underinsured motorist coverage works in a very similar way. As an example, if you did not have uninsured/underinsured motorist coverage and you were in an accident in which the at fault-driver seriously injured you but only had $50k in coverage, $50k is the most that you could receive. However, if you had $500k in uninsured/underinsured motorist coverage, your policy would cover the difference (in this case, $450k). Many drivers on the road, especially younger drivers, have minimum liability coverage, and these are also the drivers that get into the most accidents.
Many of the same people also have nothing to their name that you could sue them for, which is another reason they might not be concerned with ensuring that they have good liability coverage. Of course, even $500k is not enough to cover wages and disability costs over a lifetime.
There are two ways you can address this potential problem. One way is to get an umbrella policy that includes uninsured motorists, and the other is to get a disability policy. While you may think this is not necessary, it is important to remember that many people who thought “it could never happen to them” have been permanently disabled as a result of accidents. Also, as our Federal Government is forced to manage its record-level debt, it will have no choice but to make cuts. Social Security disability, which has been spending more than it receives in revenue for four consecutive years, is projected to exhaust its trust fund in the future. This is why it is extremely important to look at your options rather than to count on insurance others may not really have.
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