Underinsured Motorist Property Damage Coverage and Claims

Underinsured motorist coverage bridges the divide between your actual auto accident injury-related losses and the maximum amount of the at-fault driver’s liability insurance coverage.

Imagine a careless motorist rear-ends you. After checking the damage and exchanging information with the other driver, you call your insurer to make a claim. But you discover that the other driver doesn’t have adequate auto insurance. Here, having underinsured motorist insurance is beneficial. It can help cover your losses.

This article discusses what underinsured motorist insurance covers, how coverage works, and how to pursue a claim for this type of damage.

What Is Underinsured Motorist Insurance?

The terms "underinsured" and "uninsured" are often used interchangeably in the context of insurance coverage. In many cases, they’re the same thing. But uninsured motorist insurance, whether in the form of uninsured motorist bodily injury or property damage, generally pertains to accidents in which the at-fault driver has no car insurance and is an uninsured driver.

In some states, underinsured motorist coverage is limited to:

• Medical expenses and medical bills
• Lost wages
• Pain and suffering
• Other injury-related costs not covered by the at-fault driver’s policy

In these states, property damage exceeding the coverage provided by the at-fault driver’s policy is covered by uninsured motorist property damage insurance (UMPD).

But in some states, including California, you can purchase either underinsured motorist bodily injury coverage or underinsured motorist property damage coverage, collectively referred to as UIM coverage. More than a dozen states require drivers to carry uninsured and/or underinsured motorist coverage to at least cover bodily injuries. This includes Illinois, Kansas, and New York. Some other states, like Texas and North Carolina, require any uninsured motorist property damage policy to cover at least $25,000 in damage.

How Underinsured Motorist Insurance Coverage Works

Importantly, your underinsured motorist coverage must have a higher limit than the underinsured driver’s own coverage. For example, suppose your convertible sports car sustained $30,000 in damages. But the at-fault driver’s policy only covers up to $15,000. That means you need an additional $15,000 in compensation. Suppose your underinsured motorist property damage coverage is also capped at $15,000. In that case, you can’t collect on that policy. Instead, you’d just receive $15,000 from the other driver’s insurance company.

When you purchase add-ons like underinsured motorist coverage, you choose the coverage limits. Keep in mind, though, that state laws may require a certain minimum. Limits are usually split into two categories of coverage – maximum payout per individual and maximum payout per accident. Some states permit insurers to require the payment of a deductible (the amount paid out of pocket) before payments are made on claims.

How To Pursue a Claim for Underinsured Motorist Benefits

You need to take a few steps to pursue a claim for underinsured motorist benefits. The first step (beyond filing a police report and taking notes after your car accident) is to file a claim with your insurance company. Once you provide your insurance agent with information about your crash and the other driver’s insurance, your insurer will open a claim for you. Confirming that your insurance policy includes underinsured and uninsured motorist coverage is a good idea at this point.

Underinsured motorist coverage doesn’t usually kick in until you collect the at-fault driver’s liability coverage limits. So, it might take some time before your insurer approves your claim for benefits. It may be initially unclear that the at-fault driver doesn’t have enough coverage to cover damage incurred by you. Make sure you cooperate promptly with your insurer as it conducts its investigation and gathers collision insurance information.

Talk to an Attorney After Your Auto Accident

If you or a loved one has been in a car accident and you’re unsure about what steps to take regarding your auto insurance policy, you don’t have to figure out the process alone. Contact a motor vehicle attorney near you today for help.

For instance, an experienced attorney can help you interpret your auto insurance policy. They can also ensure you receive compensation for your personal injury and vehicle damage after a hit-and-run accident.