The day started out perfect. You jumped into your brand-new convertible, put the top down to enjoy the glorious sunshine, and headed toward the beach with your friends. But just as you could smell the salty air, you were rear-ended by a careless motorist. Thankfully, no one was injured. But now the back-end of your sweet ride is crunched into an accordion shape and your airbag has been deployed. After checking the damage and exchanging information with the other driver, you called to make a claim only to find out that the other driver was underinsured.

Even though the other driver was at fault, does this mean you won't be compensated? That depends on whether you have underinsured motorist property damage coverage as part of your own policy. The following information will help you learn more about this type of coverage.

What is Underinsured Motorist Property Damage Coverage?

The terms "underinsured" and "uninsured" often are used interchangeably in the context of insurance coverage, and in many cases they are the same thing (depending on the state or policy). In some states underinsured motorist coverage is limited to medical expenses, lost wages, pain and suffering, and other injury-related costs that aren't covered by the at-fault driver's policy. In these states, property damage that exceeds the amount of 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 (at least to cover bodily injuries), including Illinois, Kansas, and New York. Several states, such as Texas and North Carolina, require any uninsured motorist property damage policy to cover at least $25,000 in damage.

As you can see, the requirements and limits for this kind of coverage varies quite a bit from state to state.

How Underinsured Motorist Property Damage Coverage Works

One of the most important things to keep in mind is that your uninsured or underinsured motorist coverage must have a higher limit than the at-fault driver's own coverage. For example, let's assume your convertible sports car was damaged to the tune of $30,000. The at-fault driver's policy only covers up to $15,000, which means you need an additional $15,000 of compensation. If your underinsured motorist property damage coverage is also capped at $15,000, then you would not be able to collect on that policy (and would receive a check for just $15,000 from the other driver's insurance company).

When you purchase these add-ons, you choose the limits of coverage (which may be impacted by state laws requiring a certain minimum). These 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 it will make payments on claims.

Deciding Whether You Need UIM Property Damage Coverage

If you have collision insurance -- that is, vehicle damage coverage regardless of fault -- then you typically don't need additional coverage for uninsured or underinsured motorists. Otherwise, your liability coverage will only pay for damage and injuries caused to others and you will not be compensated for property damage caused by an under- or uninsured motorist.

Another consideration is the value of your vehicle. You would have to compare the cost of this coverage to the value of your car and may decide it's not necessary if you've already concluded that collision insurance isn't worth it.

Talk to an Attorney About Auto Insurance Coverage

Deciding on the right car insurance policy, and whether you need underinsured motorist property damage coverage, can be unnerving. Insurance is a gamble, after all. If you have questions about this or need information about filing a claim, talk to a motor vehicle attorney located near you today.