What happens when you get into an accident with someone who does not have enough liability coverage to cover your medical expenses? Recently, the Wisconsin Bar released an article focused on the importance of securing an appropriate amount of uninsured motorist insurance for when this happens. "Underinsured motorist coverage protects individuals injured in a car accident if the other driver does not have enough coverage to pay for the damages." (Wisconsin Bar, 2014).
The article discusses the changes that have recently come to light regarding uninsured motorist insurance and what it means for drivers. It used to be that uninsured motorist insurance would cover the difference between the damages and what the underinsured motorist was able to pay. Now these rules have changed. Now, your underinsured motorist coverage limits must be higher than the other driver's liability limits in order to take advantage of your coverage benefits. Unfortunately, if liability limits and underinsured motorist coverage are the same amount, you will not receive a penny from your insurance.
The rules changed once Wisconsin imposed mandatory automobile liability insurance. Although it is beneficial that there are likely more drivers with auto insurance, this mandatory insurance carries minimum liability limits which are only $25,000 per person and $50,000 per accident. The problem is that medical expenses for a significant injury in a car accident will likely far exceed these limits. The need for underinsured motorist insurance comes when one of the drivers has a minimum liability limit and it is not nearly enough to cover the accident expenses.
Having underinsured motorist insurance is a step in the right direction to protect yourself, but too many drivers do not have a reasonable amount of underinsured motorist coverage. According to the Wisconsin Bar, unfortunately, insurance companies have not taken steps to make their customers aware of the importance of underinsured motorist insurance, nor have they taken steps to explain what a reasonable amount of coverage for this insurance would be. Most offer a base amount which is not reasonable for an accident. underinsured motorist coverage is not made mandatory and these insurance companies are only required to make a one-time offer of the coverage. Surprisingly, underinsured motorist coverage is much cheaper than coverage for the cost of liability insurance.
Therefore, it is important to prioritize checking your automobile insurance policies to make sure that you have an adequate and reasonable amount of underinsured motorist coverage if you were to ever get into an accident with another driver whose liability coverage was minimal.