The difference between uninsured and underinsured motorist coverage

Our managing partner explains

Note: Transcript edited for clarity, readability, and brevity

“People are obsessed with finding ways to save on car insurance. It’s a sentiment channeled through advertising: ‘15 minutes saves you 15 percent,’ etc. But here’s the thing: You should never skimp on insurance. Many drivers are irresponsible, and they either don’t have insurance, or they don’t have enough. That’s a problem when victims begin adding up the costs of their medical bills, lost wages, and property damage.

Fortunately, there are ways that drivers can protect themselves from those situations. Two types of insurance that we strongly encourage people to analyze is uninsured and underinsured motorist coverage because it’s designed to protect you from the unknown. You can drive with some semblance of peace knowing that you won’t suffer because of the regrettable actions of others.”

Uninsured motorist coverage

“In a typical crash situation in which both motorists are insured, you’d file a claim with the other driver’s insurance company and recoup compensation for medical expenses, lost wages, and property damage. The situation gets more complicated when the at-fault driver doesn’t have insurance to begin with. That’s where uninsured motorist coverage comes into play. Very simply: if you’re involved in a crash and the other driver is at fault, or it’s a hit-and-run situation, uninsured coverage kicks in.

In Illinois, the state requires drivers to carry some form of liability coverage, which includes a legal minimum of uninsured coverage that matches your liability. You can bump that number even higher if you choose, giving you more protection.”

Underinsured motorist coverage

“Underinsured motorist coverage protects if you’re involved in a crash in which another driver is at fault and they have some insurance, but not much. It’s not uncommon for us to deal with sub-standard insurance policies, which probably says much more about the provider than the person who ended up causing the accident. The sad fact is, many people can’t afford premium insurance packages so they opt for what’s cheapest and meets state minimums. The problem is that you can’t anticipate the extent of an accident or crash, which range from mild to extremely severe. In severe cases, you could be looking at medical expenses that exceed what the at-fault driver’s insurance covers, and that’s when lawyers get involved. UM and UIM cases are typically resolved through arbitration, which is like a trial but different, namely, a jury isn’t involved.

You want to be sure to talk to an attorney who handles these types of cases so they can guide you through the process, and look in places where you might insurance coverage—places you didn’t think existed.”

Jay Stefani is the managing partner of Levinson and Stefani.