Auto insurance terminology is not always easy to understand, and this is often why people do not end up choosing the right coverage for their policies. Two types of coverage you might not understand are uninsured motorist coverage and underinsured motorist coverage, yet these two types of coverage are very important to have. Here are several things you should understand about uninsured and underinsured motorist coverage.
What uninsured motorist coverage is
The first term, uninsured motorist coverage, refers to auto insurance coverage you can buy to protect yourself against drivers who fail to have auto insurance. When people drive without auto insurance and end up causing accidents to occur, these individuals are typically unable to provide compensation to the victims in the accidents, because they have no insurance. Without insurance, the person would have to pay for the damages out of his or her own pocket, and he or she might not have the financial means to do this.
If you choose to include uninsured motorist coverage on your policy, your own insurance would pay for the damages if you ever encounter this type of situation. While it may not seem fair to have your own insurance pay for something caused by another person, situations like this happen and having this type of coverage will protect you.
What underinsured motorist coverage is
Uninsured motorist coverage works the same way almost, except that it is designed to help compensate you if the at-fault driver had insurance but did not have enough insurance to cover all your damages. If you encounter a situation like this, the person's insurance policy might pay a small amount of your damages, but then your own policy would provide additional compensation to you.
Why you should add both types of coverages to your policy
While you might not legally be required to have uninsured and underinsured coverage, you should have them anyhow. You never know when you will be in an accident with a driver who does not have any insurance or enough insurance, and adding these two types of coverage to your policy will give you extra protection if you ever need it.
If you are not sure what types of auto insurance coverage you should have, spend time talking to an auto insurance agent from a place like Kesner Insurance Agency Inc. This agent can help you understand all the different types of coverage available and will help you choose the types you should carry.