I often receive calls from people who ask me if their automobile insurance coverage is sufficient. This is a very important issue. We tend to think that we buy insurance to protect us from someone else making a claim against us. Of course, this is the case, however, what most people do not realize is that we should also buy insurance to protect us if we are injured by the negligence of another, and that other driver has no liability insurance or limited liability insurance.
This is where Uninsured/Underinsured Motorists coverage is so critically important. For example, if you suffer significant injury because of the negligence of another driver. And, that driver has no liability insurance, and you have no Uninsured Motorists coverage, then you will suffer catastrophic financial damage. However, if in this example, you have high limits ($100,000+) of Uninsured Motorists coverage, you will be able to present a claim to your insurance company for compensation of your loss up to the limit of your coverage.
In another example, which most people do not understand, and which insurance agents typically fail to discuss with their clients. If you are involved in, and injured in an accident, caused by another driver who is insured but has low limits, you may have the right to collect that driver’s full policy limit (let’s say $15,000) then proceed against your Underinsurance coverage for the difference between that $15,000 and your policy limit. So, in this example, if your Uninsured/Underinsured policy limit is $100,000, you could then proceed as against your insurance company for an additional $85,000.
Based upon this discussion, I strongly suggest that you sit down with your insurance agent and have a comprehensive discussion regarding your insurance coverage.