According to Investopedia, “Underinsured Motorist” or “UIM” is a provision in an auto insurance policy that extends coverage to include bodily and property damage that was caused by another motorist and who didn’t have sufficient insurance to cover damages. Insurance policies that contain UIM coverage will have significant differences from one state to the next.
For example, in some states, insurance companies must offer this coverage while in others, motorists are required to have it. In some states, coverage automatically applies unless the insured rejects it while in others, the coverage is optional. Furthermore, state UIM laws occasionally differ as to when the coverage can be applied or used. Most laws set maximum and minimum coverage limits as well.
Automatic and Optional Coverage
In addition to the coverage limits for UIM in your auto insurance policy, you are allowed to buy more but only up an amount specified by your insurer. Additionally, there are two types of UIM coverage – automatic and optional. In certain states, unless you reject it, UIM coverage will automatically be included in your policy. In other states, it’s an option and not required. However, it must be made available to you. According to the laws in these states, insurers may have to provide:
• a written notice of availability
• an offer for UIM coverage when applying for insurance
• an offer for UIM coverage if the insurer offers “uninsured” motorist coverage
Most state laws require that if you reject the coverage, that you put it in writing. Some states even require the signing of an agreement stating that you’ve rejected it. Finally, the courts automatically assume that you have coverage, if it hasn’t been rejected. Personal Injury Lawyer in Mississauga knows that it is important that all aspects of the claim will be taken care of.
Claiming Coverage Benefits
You need to check your auto insurance policy and the laws of your state to determine if UIM coverage begins immediately once a collision has occurred. So be sure you check with your insurer when you want to use your UIM coverage. Many states now require that the at-faulty party’s UIM coverage be completely used up before your coverage is used towards the balance owed.
Other state’s laws require filing a lawsuit against the at-fault party and get an order from the court asking for an amount that exceeds the limits of their policy. On a closing note, you may be required by your insurer to arbitrate your benefits claim. In this process, the arbitrator is a 3rd party who decides whether or not your claim is valid and how much you’re entitled to recover.