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Although liability insurance is required by law in most states, there are some people who drive without it. And if you’re in an accident caused by an uninsured driver, they may not have the funds to pay for your repairs. This is where having uninsured insurance can help you.
What is Uninsured Insurance?
Uninsured insurance and underinsured insurance, helps protect you from damages in an accident caused by another driver who has no liability insurance, or less liability than necessary to cover damages. It also covers hit-and-run accidents.
How Uninsured and Underinsured Insurance Work
There are two types of uninsured and underinsured insurance options:
- Uninsured/ underinsured motorist bodily injury coverage – helps pay for medical expenses, pain and suffering, and lost wages. This includes hit-and-run crashes. This insurance does not have a deductible.
- Uninsured/ underinsured motorist property damage coverage – This coverage pays for any damages to your vehicle. This doesn’t protect against damage caused by hit-and-run accidents. This coverage typically comes with a deductible, however your insurer may send an invoice to the person at-fault and reimburse you for it.
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Limits to Uninsured Insurance
With uninsured insurance, you select the limits. Those will determine the maximum amount your insurance company will pay. Typically, you can select either a split limit or a combined single limit. With a split limit, the first number is the maximum payout per person, while the second number is the maximum total payout per accident.
For example, if you choose a split limit of $10,000/$20,000:
$10,000 would be the most your insurance would pay for injuries one person sustained.
$20,000 would be the most your insurance would pay for injuries all other people sustained.
In a combined single limit of $20,000:
$20,000 would be the most your insurance would pay for all injuries suffered in an accident.
With uninsured motorist property damage, the limit, which is a single number, represents the maximum total payout for all property damage in an accident.
Stacking Uninsured Motorist and Uninsured Motorist Bodily Injury Insurance
In some states, you can stack your uninsured motorist bodily injury and/or underinsured motorist bodily injury coverage. Stacked insurance, which typically costs a bit more, increases your coverage based on the number of cars you insure. For example, if you have three vehicles worth $10,000 in coverage and you’re hit by an uninsured driver, you could use all three vehicle’s coverage. This would give you a total of $30,000 in coverage.
Even if uninsured insurance and underinsured insurance aren’t required in your state, there may be benefits to have the extra security they provide. If you’re unsure if uninsured insurance is right for you, or you want to understand how it works where you live, contact Signature Insurance Group today , our agents are highly-skilled and would be happy to help!
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