Insurance Requirements In Virginia – Uninsured And Underinsured Coverage Explained

A car accident can be a frightening and potentially costly experience. Unfortunately, on average, there are over five million car crashes per every year. Depending on the level of damages sustained in the crash, resulting fees can cost those involved thousands of dollars. Car insurance companies offer services to cover some, if not all, of these costs. However, many people do not really know or fully understand what exactly they’re buying. Furthermore, motor vehicle insurance can be pricey — especially for comprehensive coverage plans. Thus, it is not uncommon for one party in an accident to have an insurance plan that doesn’t cover all the damages. Worse yet, sometimes the party may have no insurance plan at all. According to¬†The Insurance Research Council, in 2012 around 1 in 8 drivers were uninsured.

Uninsured Motorist Coverage

Coverage for these two scenarios are known as uninsured and underinsured motorist coverage. First, let us explore the former plan, uninsured motorist coverage. The problem it protects against is relatively straightforward — the responsible party does not have any car insurance plan. This may be surprising to some, considering all fifty states require some form of car insurance. However, as of 2012, close to 13% of all drivers are entirely uninsured. This poses a problem for those law-abiding citizens who do purchase car insurance.

For example, say you got into a car accident, but it was deemed to not be your fault. If both parties had insurance, as mandated by law, you would file a claim with the at-fault driver’s car insurance company. They would pay to get your car repaired, and if necessary, compensate you for any lost wages and medical expenses. However, if this incident happens and you do not have¬†uninsured or underinsured motorist coverage, you will have need to pay out-of-pocket for these aforementioned costs. This can be very pricey, and seems incredibly unfair given you did nothing wrong. Thus, purchasing uninsured motorist coverage makes sense to many, as it covers costs that should’ve been paid by the at-fault party.

Underinsured Motorist Coverage

Underinsured motorist coverage is similar to uninsured motorist coverage, with some differences. More often than not, the at-fault party will have some form of motor vehicle insurance. Although this sounds good on paper, their insurance plan may not be much better than no insurance at all. Car insurance plans vary, and some cover more damages than others. Naturally, the more damage covered by the plan, the more expensive it is. Thus, many people will opt for a cheap plan to save money. This often poses a problem in the event of an actual accident.

To further explore this concept, let’s take another look at the previous car accident example. You get into a car accident, and the other party is at-fault. Damages sustained to your car total $5,000. However, you are told by the other party’s insurance company that they can only cover $2,000 in damages. If you did not purchase underinsured motorist coverage, this would leave you to cover $3,000 out of pocket. If you did purchase underinsured motorist coverage, your insurance company would cover the difference is damages, leaving you in the clear.

Learn More About Car Insurance

If you or a loved one were recently in a motor vehicle accident, and the other party did was either entirely uninsured or underinsured, you may be liable to cover extensive damages. To learn more about car insurance cases, in particular, uninsured or underinsured motor vehicle coverage, contact an experienced auto insurance lawyer.