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Personal Insurance Rate Hike Leaves Drivers Underinsured or Uninsured

The increase in personal insurance rates has undoubtedly led to a decrease in people being adequately covered. As insurance premiums rise, some individuals may find it challenging to afford the new rates, leading them to make difficult decisions. In this situation, some drivers are faced with the reality of driving underinsured or uninsured.

Driving underinsured means having an insurance policy that does not provide sufficient coverage to protect against potential damages or liabilities in an accident. On the other hand, driving uninsured means having no insurance coverage at all. Both scenarios can create significant problems for drivers and the overall safety of the road.

When drivers are underinsured or uninsured and get involved in an accident, several negative consequences can arise.

  • If they are at fault, they may be held personally responsible for covering all the damages, medical expenses, and liabilities resulting from the accident. This could potentially lead to financial ruin for the at-fault driver, as they could be required to pay out of pocket for any expenses not covered by their insurance policy.
  • If the at-fault driver lacks adequate financial resources, the other party involved in the accident may not receive the compensation they are entitled to. This can leave innocent victims without proper reimbursement for their medical bills, property damage, and other losses incurred in the accident.

To address these concerns and protect responsible drivers, many states in the US require auto insurance policies to include uninsured/underinsured motorist coverage (UM/IUM). This type of coverage is designed to safeguard insured drivers from the financial fallout of accidents involving uninsured or underinsured drivers. The lowest liability limits you should carry for UM/UIM is $100,000 per person/$300,000 per Accident (100/300).

Uninsured motorist coverage provides benefits to the policyholder and other eligible occupants of their vehicle if they are injured in an accident caused by an uninsured driver. On the other hand, underinsured motorist coverage comes into play when the at-fault driver does have insurance, but the coverage limits are insufficient to fully compensate for the damages caused in the accident.

With uninsured/underinsured coverage, if you are the innocent party involved in an accident with an uninsured or underinsured driver, your own insurance policy will step in to cover your medical expenses, lost wages, and property damage up to the limits of your coverage. This ensures that you won't be left in a dire situation due to someone else's lack of insurance.