How Underinsured Motorist Coverage (UIM) Benefits Car Accident Victims
WHAT IS UNDERINSURED MOTORIST COVERAGE (UIM)?
Underinsured motorist coverage (UIM) is provided by your own insurance carrier and affords additional compensation to you if the at fault party’s policy limits are not sufficient to fully compensate you for your injuries. You are not legally required to purchase UIM coverage on your policy. However, it is of the utmost importance that you do so to protect your own interest.
WHEN DOES UIM COVERAGE COME INTO EFFECT?
In Kentucky, minimum bodily injury policy limits are $25,000.00 per injured party with a maximum total payout of $50,000.00. If you are injured severely enough in an automobile accident, these limits may not offer enough compensation to cover your medical bills and pain and suffering. Underinsured motorist coverage affords you additional funds to cover these expenses. UIM comes into play once the bodily injury provider has tendered its insured’s policy limits and provides you with additional recovery for your injuries.
AM I REQUIRED TO PURCHASED UIM COVERAGE?
No. You may waive UIM coverage from your policy. However, should you suffer a severe injury, if you don’t have UIM coverage, you may not receive the maximum compensation you are owed for the injuries you’ve sustained. Even though you aren’t legally required to purchase UIM coverage, UIM coverage provides you with a significant benefit for only a relatively minor increase to your monthly premium.
MY FAMILY HAS MULTIPLE INSURANCE POLICIES IN OUR HOUSEHOLD. AM I ALLOWED TO COLLECT FROM ALL OF THEM?
Yes. In Kentucky, you are allowed to “stack” underinsured motorist policies; even if they aren’t directly applicable to the vehicle you were in at the time of the collision. To explain this a bit better, let’s use an example. Frank owns an automobile insurance policy that affords UIM coverage. Additionally, his mother, with whom he lives, owns a policy that offers UIM coverage as well. He is severely injured in an automobile collision in which he is not at fault. The at-fault person’s insurance pays out its policy limits. Frank now has the opportunity to collect not only from his own UIM coverage, but also from his mother’s policy, should the funds be required to fully compensate him. This is the concept of “stacking” UIM policies.
*Note: Other states may not offer the opportunity to stack UIM policies. Be conscious of the law in your particular state and contact an attorney practicing within that state to answer any questions.
WILL MY INSURANCE RATES BE MORE EXPENSIVE IF I FILE A UIM CLAIM WITH MY INSURANCE CARRIER?
While that is largely dependent upon the particular insurance carrier, it is possible that your rates could increase. However, the potential increase is minor compared to the tremendous benefit and peace of mind you receive by knowing that you have additional funds available to cover your medical expenses should the at-fault party’s insurance policy be insufficient.
SHOULD I PURCHASE UNDERINSURED MOTORIST COVERAGE?
Yes! Without a doubt, you should ALWAYS have UIM coverage available to you. It is more than worth the small additional cost on your monthly premium to ensure that your interest is protected.