Underinsurance (Uninsurance and Sum Insurance)
Insurance brokers often do not properly inform their clientele about a very important and rather inexpensive form of insurance which can easily and effectively protect you when you are in an automobile accident with another vehicle which has either minimums of low amounts of liability insurance. For these instances you can actually purchase your own insurance which will pay you for your own injuries.
Perhaps using an example can help to explain this situation. If you’re driving your car and you have underinsurance coverage limits of $250,000 and have an accident with a car that has $25,000 of liability insurance then your own policy is available to pay the difference in the amount of your underinsurance coverage and the other vehicle’s liability coverage – in this case, $225,000.
Please don’t think that this is uncommon. The number of cars with the minimum coverage of $25,000 or only $50,000 represents about one half of the cars on the roadways.
Protect yourself. Ask your broker for increased underinsurance coverage limits.