How Uninsured and Underinsured Driver Coverage Works
In case of underinsured drivers, it may not be obvious at early stages that other side does not have enough coverage. So, your policy may kick in later and pay the shortfall of the third party policy. In some cases it may take a little longer to settle the claim due to assessments involved. For example, if the uninsured driver is found seventy percent at fault and you are thirty percent part of the claim would be paid by UM coverage and other portion by your own policy.
When policyholders have a collision coverage it would pay the damages to your car automatically in most states. Collision coverage is required to include uninsured driver cover in most states. UM/UIM pays for damages to the vehicle if you do not have collision coverage. Also, it covers the medical costs of your injuries and other consequential losses mentioned above.
Insurance rules and regulations are different in each state. In some states these covers are required to be included automatically. If not, you can always add them on your policy.
It is nice to know that you are covered even the other driver is not. What is the point of spending a lot of money on car insurance just to learn that the other guy does not have coverage and cannot pay you? Even you have to pay a little more it is probably worth the money.
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