Underinsured and uninsured motorist coverage in Pennsylvania is a requirement for all licensed drivers. Although state law requires that all licensed drivers carry liability insurance in order to legally drive a car, the reality is that many drivers don’t comply with this law. A considerable number, nearly 15%, of drivers on the road do not have liability insurance. For obvious reasons, these drivers are known as uninsured motorists (UM). Other drivers comply with the law, but will only carry the minimum liability coverage that is required by the state. This minimum coverage is often not enough to cover the medical bills or property damage costs that are incurred in an accident. Insurance companies refer to these drivers as underinsured motorists (UIM).
In order to protect their clients in case of an accident, insurance companies offer uninsured and underinsured motorist coverage. This insurance will cover the expenses incurred by victims, when the at-fault driver either does not have insurance or doesn’t have enough liability insurance to cover the costs involved. It will also cover medical and property expenses from a hit-and-run accident.
For instance, if the medical costs of the victim come to $25,000 and the at-fault driver’s liability only pays up to $15,000, then the victim’s UM/UIM coverage will pay the remaining $10,000 in medical bills. Most insurance companies offer separate policies for UM/UIM bodily injury liability and property damage liability insurance.
Who and what is covered by UM/UIM liability coverage:
Uninsured/underinsured motorist bodily injury coverage includes the policyholder, other drivers covered by the policy, and any passengers in the vehicle at the time of the accident.
Like liability insurance, UM/UIM bodily injury coverage is purchased with limits. If the at-fault driver is an uninsured motorist, then the victim's insurance policy will pay up to the per person/per accident limits purchased by the victim. If the at-fault driver is an underinsured motorist, then the underinsured's policy will pay to its limit, and the victim's policy will then pay the balance, up to the limit purchased. Like liability coverage, UM/UIM bodily injury insurance covers bodily injuries, lost wages, pain, and suffering.
An UM/UIM property damage insurance policy will pay a certain amount towards the repair of the damaged vehicle and some policies may include coverage of personal property. These amounts can be set by the state, and will vary by state and policy provisions. While available in Pennsylvania, it is not available in all states in the United States. UM/UIM property damage does not replace collision insurance. The limits are not enough to cover all repair/replacement costs, and it only applies if you are in an accident that was caused by an uninsured or underinsured motorist.
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