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Glossary > Insurance > Auto Insurance > Uninsured
Legal Disclaimers

UM-UIM Limits

Uninsured/Underinsured Motorist (UM/UIM) Limits are coverages within an auto insurance policy that protect you if you are in an accident caused by a driver who doesn't have insurance (uninsured) or doesn't have enough insurance to cover your damages (underinsured). These coverages step in to help pay for your medical bills, lost wages, and other expenses when the at-fault driver cannot fully compensate you.

Example #1

Imagine you're in a car accident caused by a driver who doesn't have any insurance. Your UM coverage would kick in to help cover your medical costs and car repairs.

Example #2

Now, consider a scenario where the at-fault driver has insurance, but their policy limit is too low to cover all of your expenses. In this case, your UIM coverage would bridge the gap to make up for the shortfall.

Misuse

Misusing UM/UIM coverage could involve attempting to fraudulently claim benefits for an accident that was not caused by an uninsured or underinsured motorist. This undermines the purpose of the coverage, which is to protect you in situations where the other party cannot fully compensate you, potentially leading to increased premiums for all policyholders. It's important to only utilize UM/UIM coverage when it genuinely applies to your situation.

Benefits

The benefit of UM/UIM coverage is evident when you find yourself in an accident with a driver who lacks insurance or sufficient coverage. Without this protection, you could be left with significant out-of-pocket expenses, especially if you suffer from serious injuries or extensive property damage. Having UM/UIM coverage ensures that you have financial support when dealing with such situations.

Conclusion

UM/UIM Limits are crucial components of an auto insurance policy, providing a safety net for drivers in scenarios where they would otherwise bear the financial burden due to the negligence or inadequate insurance of others. It offers peace of mind by filling the gaps left by uninsured or underinsured motorists, safeguarding policyholders from potential financial distress.

Related Terms

CoverageClaimUnderinsuredUninsured Motorist CoverageBeneficiary

Last Modified: 4/29/2024
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