October 18, 2010

Underinsured Motorist Coverage And Its Role In Auto Insurance

Underinsured motorist coverage (UIM) is a source of insurance coverage for injuries under your personal or commercial auto insurance policy. Its role comes into effect when you are involved in a collision, and the other driver is at fault but does not have adequate bodily injury liability coverage to compensate you for your injuries. This is an important coverage to consider when researching auto insurance online quotes.

Underinsured motorist coverage is optional in some states but mandatory in others. This coverage is sometimes tricky to understand due to the complexity of the laws of each state. Generally, if you are injured in a car accident, you will file a bodily injury liability claim against the at-fault driver's insurance company and collect the insurance coverage under that policy. If the amount of liability coverage is not sufficient to compensate you under that policy, you can then turn to your own insurance policy and file a claim for underinsured motorist coverage benefits. Think of it as an additional layer of coverage or excess insurance coverage in the unfortunate event of serious injuries from a car accident. This becomes an important coverage to think about when shopping for auto insurance online.

If you have underinsured motorist coverage, you can notify your insurance company of your intention to present a claim. Some states and insurance policies have time limitations to present a claim, so you will need to know this ahead of time. Your insurance company assigns a claims representative or adjuster to review your medical treatment, taking into the account the pain and suffering endured during the recovery period. In addition, out-of-pocket medical bills or lost earnings are also considered. The adjuster must also know how much bodily injury compensation that you received under the at-fault driver's insurance policy. Applying the laws of that state, the adjuster will then extend a settlement offer.

If you ultimately disagree with the amount of the settlement offer, review the policy to see what recourse is available. Some auto insurance policies require arbitration to decide the value of your claim. An arbitration hearing takes place in front of three arbitrators, and an award is entered by the arbitrators, which becomes binding on the parties. Alternatively, some policies do not offer arbitration, so the parties must litigate the claim in a court of law. Your recourse is to file a lawsuit against your insurance company. Because this coverage has legal ramifications, you may want to consider talking to an attorney for assistance.

When searching for auto insurance online quotes, take careful consideration about purchasing underinsured motorist coverage. It may become an invaluable coverage in case you are involved in a serious auto accident.