Excess Uninsured/Underinsured Motorist Coverage
Part of being a responsible car owner is having a robust insurance policy that helps provide financial protection. One such coverage is uninsured/underinsured motorist (UM/UIM) insurance. This may help cover car repairs and medical costs for you and your passenger if the driver at fault doesn’t have enough insurance or any auto insurance at all. You can also add additional coverage with excess underinsured/underinsured motorist coverage. This endorsement can be added to a personal umbrella insurance policy to provide extra uninsured motorist coverage above the policyholder’s current limits. A personal umbrella insurance policy is a specific type of insurance policy that provides extra liability coverage that may kick in when the limit of another insurance policy, such as auto or homeowners, has been reached.
If a driver or passengers are injured due to the negligence of an uninsured or underinsured driver, you may seek compensation for injuries and damages through the UM and UIM portions of your policy:
Uninsured motorist coverage is used when the at-fault driver can’t pay due to a lack of insurance.
Underinsured motorist coverage is used when the driver’s liability limits are lower than the costs of the accident.
An excess uninsured/underinsured motorist endorsement, which can be added to a personal umbrella policy, is used after an auto policy’s UM/UIM limits have been exhausted.
Importance of Excess Uninsured/Underinsured Motorist Coverage
If you are injured or your vehicle is damaged by an uninsured or underinsured driver, you could end up paying for medical bills and/or vehicle repairs out of pocket. Adding a UM/IUM endorsement onto your umbrella policy helps provide extra financial protection. You should consider excess UM/IUM motorist coverage if any of the following are true:
You live in a state with a high percentage of uninsured drivers.
You want to avoid using your savings to cover your injuries in the event of an accident.
You want to avoid a lawsuit to recover your expenses.
You can afford an increase to your umbrella policy premium.
Excess Uninsured/Underinsured Motorist Coverage in Action
If you are in an accident with another person and they’re found to be at fault but do not have enough insurance to cover the damage, your underinsured coverage will kick in. For example, suppose the medical and property damage totals $200,000, but the other driver’s insurance only covers up to $100,000. In that case, you can claim the balance against your insurance provider up to the limit of your policy’s coverage, plus the UM/UIM coverage under your personal umbrella policy. If you didn’t have these coverages, you would have had to pay everything over the $100,000 out of pocket.
For More Information
Excess underinsured or uninsured motorist coverage is critical for added protection. Working with a knowledgeable and experienced insurance agent ensures you have a complete insurance policy. For more information, contact us today.
© 2023 Zywave, Inc. All rights reserved. This Know Your Insurance document is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.