The Difference Between the Uninsured and Under-insured
The terms "uninsured" and "under-insured" can be misleading, especially when the reader sees them and assumes what the interpretation might be. When dealing with insurance policies and the coverage provided, it's crucial to understand the difference between the two and how each of them can affect the outcome of a no fault car accident.
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Definition
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The term "uninsured" denotes Uninsured Motorist Coverage (UIM). It's a clause within the policy that includes coverage to the policy holder and all vehicle passengers if they are involved in a car accident where the driver of the other car is at fault and doesn't have automobile insurance. Under-insured Motorist Coverage (UMC) is a condition written in a policy that covers the policy holder involved in a car accident where the other driver is at fault and is insured but does not have sufficient coverage to pay for damages.
Features
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Most insurance companies offer similar coverage to policy holders for accidents caused by either uninsured or under-insured drivers. Most coverage protects the policy holder and his family in the event of accidental injury while driving or riding in any vehicle in the state or province, or if involved in an accident while riding in a taxi cab, bus or limousine.
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Considerations
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In the United States and Canada, there is a basic legal minimum standard required to drive a vehicle. Those who are cash-strapped yet realize the need for car insurance will purchase only the basic, and according to the Lombardi Law firm, the number of drivers purchasing only the basic coverage is on the rise. Combined with the constant, gradual increase in the number of vehicles on the road, the result is more reported accidents. And most of these policy holders don't realize the significance of being sufficiently insured until they are involved in an accident.
Significance
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The Lombardi Law Firm also reports that there is a correlation between a high unemployment rate and the number of uninsured automobile drivers. Many people will risk driving without insurance because they can't afford it, and others will be insured only for the very basic legal minimums. Coverage for a UIM and/or UMC would mean that the policy holder who is involved in a car accident caused by an uninsured or under-insured driver would still be fully covered and not have to suffer loss because of the other driver's misfortune of not being able to afford sufficient coverage.
Warning
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Although the general rules for insurance policies and coverage are uniform across the country, not all policy conditions and clauses are legal and accepted outside of the policy holder's geographic location. It's crucial that the policy holder understands where the policy limitations are, what is accepted and what is not included in other states or provinces. Assuming that the coverage is the same everywhere could become a financial disaster in the event of a car accident in another state or province caused by someone who does not have car insurance.
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