Car accidents are stressful enough, but the situation becomes even more complicated when the at-fault driver doesn’t have enough insurance to cover your damages. Unfortunately, underinsured drivers are more common than many people realize. Even if drivers meet the minimum legal insurance requirements, those limits are often too low to cover serious injuries or property damage. That’s why protecting yourself in advance is essential.
This article explains who underinsured drivers are, the risks they pose, and the steps you can take to safeguard your finances in the event of an accident with one.
Who Is an Underinsured Driver?
An underinsured driver is someone who has car insurance but not enough coverage to fully pay for the injuries or damages they cause in an accident. For example, if they carry the minimum liability insurance required by their state—but your total medical bills and car repairs exceed that amount—you may end up footing the difference.
In many states, minimum coverage amounts are as low as $15,000 to $25,000 for bodily injury per person. That doesn’t go far in a serious accident involving hospitalization, surgery, or long-term therapy.
The Financial Risk of Being Hit by an Underinsured Driver
Here’s what can happen if you’re involved in a crash with someone who doesn’t carry sufficient insurance:
- Your car repair or replacement costs may not be fully reimbursed.
- Medical expenses could exceed the other driver’s policy limits.
- You may miss work due to injuries, with no compensation for lost income.
- Pain and suffering or long-term care costs might not be covered at all.
If you don’t have the right protections in place, you may be forced to cover the remaining costs out of pocket or attempt to sue the driver—which could be time-consuming and ultimately unproductive if they don’t have assets.
Step-by-Step: How to Protect Yourself
1. Add Underinsured Motorist Coverage to Your Policy
The most effective way to protect yourself is by adding Underinsured Motorist (UIM) Coverage to your auto insurance policy. This coverage kicks in when the at-fault driver’s insurance isn’t enough to pay for your injuries or damages.
There are two main types:
- Underinsured Motorist Bodily Injury (UIMBI): Covers medical expenses, lost wages, and pain and suffering.
- Underinsured Motorist Property Damage (UIMPD): Pays for repairs to your vehicle or property.
Some states bundle underinsured and uninsured motorist coverage, while others offer them separately. Be sure to understand what your policy includes.
2. Ensure Coverage Limits Match Your Needs
Even if you already have UIM coverage, it’s important to review the limits. Many people carry the same limits for uninsured and underinsured motorist coverage as they do for liability.
Here’s a simple guideline:
- Match your UIM coverage to your liability limits (e.g., 100/300/100).
- Consider increasing limits if you drive frequently, live in a high-accident area, or have family members who often ride with you.
Higher limits mean more protection for your health and finances if you’re hit by an underinsured driver.
3. Check for Stacking Options (If Available in Your State)
Some states allow stacking coverage, which means you can combine coverage limits from multiple vehicles on your policy to increase your total protection.
For example, if you have two cars insured with $50,000 in UIM coverage each, stacking would provide $100,000 in total coverage. This can be especially beneficial in high-cost accidents.
Ask your insurance agent if stacking is allowed in your state and whether it makes sense for your situation.
4. Include Collision Coverage for Property Damage
Not all states require or offer underinsured motorist property damage coverage. If yours doesn’t, make sure you have collision coverage on your policy. While it doesn’t depend on who was at fault, it can help pay for vehicle repairs after an accident.
Just be aware that collision coverage typically comes with a deductible, which you’ll have to pay before insurance covers the rest.
5. Document the Accident Thoroughly
If you’re ever involved in an accident—especially with a potentially underinsured driver—proper documentation is critical. This will support your claim and help your insurer step in quickly.
Here’s what to do:
- Call the police and get a report.
- Exchange insurance information with the other driver.
- Take photos of the vehicles, injuries, and accident scene.
- Get contact information from witnesses.
- Seek medical attention immediately.
The more detailed your documentation, the stronger your case will be when filing with your own insurer under UIM coverage.
6. Know Your Legal Options
If your damages exceed both the other driver’s and your own insurance coverage, you may have the option to pursue legal action. However, suing an underinsured driver often doesn’t yield much unless they have significant assets.
In most cases, your best bet is to rely on your insurance protections and avoid litigation unless the damages are substantial and the other party is capable of paying a judgment.
Table: Coverage Comparison for Underinsured Driver Protection
| Coverage Type | What It Covers | Required? |
|---|---|---|
| Underinsured Motorist Bodily Injury | Medical bills, lost wages, pain and suffering | Varies by state |
| Underinsured Motorist Property | Vehicle and property repair costs | Not always |
| Collision Coverage | Vehicle damage regardless of fault | Optional |
| Stacking (if allowed) | Combines limits from multiple vehicles | Optional |
Additional Tips for Protection
- Review your policy annually: Ensure your coverage still meets your needs and reflects your current assets.
- Ask your insurer about accident scenarios: Understand exactly how your policy would respond in different situations.
- Avoid bare-minimum coverage: While it may save money short-term, it can cost much more after an accident.
- Educate household members: If others in your household drive your car, make sure they understand coverage limits and procedures.
Conclusion
Being hit by an underinsured driver can leave you vulnerable to significant financial loss if you’re not properly protected. Fortunately, with the right insurance coverage in place—especially underinsured motorist protection—you can shield yourself from the gaps in someone else’s policy.
Don’t wait until after an accident to discover you’re not adequately covered. Review your auto insurance now, speak with your provider about your options, and make the necessary adjustments to ensure peace of mind every time you get behind the wheel.
You May Like To Read:
- Can You Get Insurance for a Car in Someone Else’s Name?
- How Car Sharing Affects Your Insurance Policy
- The Benefits of Full Coverage Car Insurance
- Is Third-Party Insurance Enough for Your Vehicle?
- Top 5 Differences Between Commercial and Personal Auto Insurance
- Best Practices for Renewing Your Car Insurance
- Is It Worth Paying for Rental Reimbursement Coverage?
- What Is Uninsured Motorist Coverage?