By law, you have to carry liability insurance when it comes to covering their car in an event of an accident. You should also carry uninsured and underinsured motorist in case you are ever involved in an accident where the third-party does not carry any insurance.
Uninsured Motorist (UM) covers you, your family, and passengers in your vehicle if you were involved in an accident where the other party was at fault and does not have any auto insurance to cover the accident. The best coverage equates to 100k per person, and 300k per accident. You are eligible to make a claim for UIM benefits against your own car insurance company. You are able to use your uninsured motorist coverage if you are hit by a driver who carries no car insurance, and if the third party is held responsible or at fault. Driver who have no car insurance typically do no have any money either. In that case, you would make a claim against your own insurance company up to the limit of your uninsured driver coverage.
Underinsured (UIM) is the insurance that covers anything above and beyond what the other party (at fault party) has. If their insurance but does not have enough to cover the entire accident, you would file a claim against your own insurance company to compensate for the difference. For example, your total damages could equate to 50k, and the third-party driver at fault has a 15k limit per person and 30k limit per accident there’s a difference there of 20k. If you had UIM, you’d be able to tap into your own policy and cover that difference without having it come out of pocket.
By law, if you utilize your UM or UIM, your insurance rates can’t go up. Taking advantage of these policies won’t increase a policy increase during your renewal.
If you have reason to believe that the third-party driver at fault is uninsured, you should give your insurer notice as soon as possible. An underinsured driver claim will generally take longer to develop. You generally do not know that you are going to have an underinsured driver claim until your medical treatment progresses and you and your attorney as a better understanding of the value of your car accident case.
In general, an uninsured or underinsured driver claim progresses in the same way as a regular car accident claim. The only difference is the claim is against your own insurance company. However, the main difference is if you and your insurer cannot agree on a settlement offer, you cannot file a lawsuit against your insurer.