Top What Underinsured Motorist Coverage Covers

Coverage comes into play when the negligent driver's insurance can't cover your costs. For example, if the at-fault driver only has $25,000 in bodily injury coverage, and you've accrued $43,000 in hospital costs, your underinsured motorist policy will pick up the $18,000 difference―provided, of course, it does not exceed predetermined limits.

Because some states mandate UIM and others offer it as an option, limits are contingent upon state laws. For more information, contact your local insurance agent or the Department of Motor Vehicles.

In the event of an accident, UIM will cover:

• Medical costs

• Lost wages

• Rental car reimbursement (optional)

• Property damages (in some states)

Top Who Needs Underinsured Motorist Coverage

If you're unsure whether your state mandates UIM, call your local insurance agent or your state's Department of Insurance. If it is an option, you should strongly consider UIM coverage if you currently carry a limited health insurance plan.

Those who are covered under this policy include:

• The policy holder

• Authorized drivers

• Passengers

Top Where to Get Underinsured Coverage

You can purchase UIM from any reputable insurance carrier. But before buying, especially if it's an option, be sure to compare quotes from a variety of carriers. You'll find comparative shopping also has its benefits in the insurance world. Don't, however, let cost be your only criteria. Be sure the policy you're checking into provides adequate protection.

Top How Much Underinsured Motorist Coverage Costs

Fortunately, the cost of UIM is not prohibitive. It generally costs around 10% of your entire car insurance premium. The amount of coverage you see fit depends on your current health insurance plan.

For example, if you carry maximum coverage, you only need a limited UIM policy; otherwise, you'll be paying for two plans with overlapping medical coverages. However, if you carry an insurance policy with limited coverage, you'll then want to maximize, if possible, your UIM protection because UIM will not only cover medical costs, but also wages lost due to injury.