Your vehicle insurance policy can be supplemented with underinsured motorist protection. You'll be covered if the other party involved in an accident doesn't have adequate coverage. If someone else is hurt in an accident, the negligent party's insurance should help pay their medical bills.

The injured party's underinsured motorist coverage would kick in if the policy limit were less than the total cost of the losses. However, underinsured and uninsured motorist coverage are separate but related policies that are sometimes combined.

A Guide to Underinsured Motorist Protection

Underinsured motorist coverage comes in when one is involved in an accident that was not their fault, but the at-fault driver does not have adequate insurance to pay for the damages. After a claim is filed, the insurance company will pursue reimbursement from the at-fault driver's policy.

Underinsured motorist coverage would kick in if the other driver didn't have enough insurance to pay your costs up to the policy's maximum. Your car and medical bills add up to $200,000 in damages. However, the other driver's insurance only goes up to $100,000.

To the extent that you have remaining coverage under your policy, you can submit a claim to your insurance company. All you may ask for is reimbursement for your actual out-of-pocket expenses caused by the mishap and no more.

Advantages of Having Coverage for Underinsured Motorists

If you are involved in an accident with a driver who does not have enough insurance to cover your losses, underinsured motorist coverage is a valuable addition to your auto insurance policy.

More often than one may think, this occurs: The Insurance Research Council estimates that 1 in 8 licensed U.S. drivers are uninsured. Even if someone obtains insurance, they could have the bare minimum of protection their state mandates. Only New Hampshire and Virginia do not require any minimal vehicle insurance coverage for drivers.

How Do I File an Insurance Claim?

The first step in submitting a claim for damages caused by underinsured driver is to notify your insurance provider of the incident. The next step is to establish the basic facts of the collision, such as whether or not the other motorist has insurance. If you think you might need to claim your uninsured or underinsured motorist coverage, your insurance carrier can walk you through your choices.

After an accident, filing a lawsuit against an uninsured motorist is usually a simple process because the at-fault driver will either have insurance or won't. The insurance company will begin the claims process by opening a file, investigating, requesting, reviewing relevant medical data, and attempting to assign a monetary value to the claim. Depending on the severity of your wounds, this might take anything from a few weeks to six months or more.

How Much Can I Recover for an Uninsured Driver Claim?

Your policy's maximum benefit amount caps your total compensation for an uninsured motorist claim. A negative trend for insurers is customers who buy minimal liability coverage but plenty of uninsured/underinsured motorist protection.

Bad-faith Potential

If you file a claim against an uninsured or underinsured motorist, your insurance company will likely look at the costs of your care, the extent of your injuries, and other factors. Some jurisdictions allow you to file a bad faith lawsuit against your insurance provider if they conduct an inquiry into your uninsured/underinsured motorist claim.

Every insurance provider has a responsibility to investigate and settle claims reasonably. An insurance company's commitment to act in good faith may have been breached if it treated your uninsured/underinsured motorist claim with undue hostility.

Can I Sue An Uninsured Driver?

The law allows you to sue the motorist who caused your vehicle accident even if they have no insurance or very little coverage. Of course, the big question is whether this endeavor is worth pursuing. It takes both time and money to file a lawsuit.

Whether you plan to go to trial or seek a settlement from the at-fault motorist, you must ensure that the defendant has the financial resources to cover your costs if you win your case. Remember that winning a lawsuit in court is one thing, but collecting money from a defendant is another, and it may not end well for you if the defendant cannot pay. Find out more about your options for enforcing a judgment.