Buying Insurance

Lesson 2: Auto Insurance

Uninsured and Underinsured Motorist

The fourth part of an auto insurance policy is Uninsured and Underinsured Motorist. This insurance protects you in the event that you are involved in an accident caused by another driver who either has no auto insurance or has insurance with limits of liability so low that they are exceeded by you injuries. Why, you ask, should you have to pay for insurance that the other guy should be paying for? The answer is: you shouldn't. However, the facts are that there are many folks out there driving (illegally) without auto insurance or with insurance with the minimum possible liability limits, typically $20,000 per person and $40,000 per accident. Ironically, the underinsured drivers or those driving without insurance are frequently those with the poorest driving records. The number of their traffic violations and or accidents have caused their cost for auto insurance to skyrocket. Consequently, they have either the legally required minimum of insurance, or perhaps no insurance at all. (Buyer beware:consider your Uninsured/Underinsured insurance limits carefully. It is you and your family you are protecting). More revealing examples of how Uninsured & Underinsured motorist coverages work can be found in Hungelmann, pp.32-34.

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