Many drivers operate an automobile with little to no insurance.
In 2019, 12.6 percent of motorists—about 1 in 8 drivers—were uninsured, according to a study released this year by the Insurance Research Council (IRC). Mississippi had the highest percentage of uninsured motorists in 2019 (29.4 percent), followed by Michigan (25.5 percent), and Tennessee (23.7 percent). Underinsured motorists, unlike the uninsured, have car insurance but their liability coverage limits are not enough to cover an injury resulting from an accident they cause. States set the minimum limits on automobile insurance coverage. In Tennessee and Kentucky, the minimum amount of liability insurance coverage required by law is $25,000.
If you are injured in a car accident and the medical bills exceed the amount of available insurance coverage, you will not be fully compensated for your injuries. This could result in paying out-of-pocket for injuries caused by the carelessness of another. For example, where medical bills exceed $50,000, but the at-fault driver only has the minimum amount of liability insurance coverage required by state law ($25,000), there is a shortfall of $25,000 or more. The at-fault driver’s $25,000 in liability coverage is recoverable, but generally nothing more. Unless the at-fault driver is wealthy, has recoverable assets, and is unlikely to take bankruptcy to discharge a judgment, you will not recover a penny more from the at-fault driver.
To fully protect you and your family, underinsured motorist coverage is something you should carefully consider and speak with your insurance agent about. This type of coverage is a specific category of automobile insurance that you buy to protect you and your family from an at-fault driver with little to no insurance coverage. Before purchasing underinsured coverage, ask your insurance agent for a quote to see what the extra underinsured coverage will cost per month. Make sure you are getting a fair quote, but it is money well spent.
If you are unsure whether you already have underinsured motorist coverage, we strongly advise you to do a quick check-up and learn how much coverage is listed on your automobile insurance policy. To do so, find the declaration of rights page to your automobile insurance policy. If your household has multiple vehicles, find the declaration pages to all your vehicles. Looking at the declaration page, you can see how much insurance coverage you purchased. We strongly recommend purchasing no less than $100,000 in underinsured motorist coverage. If this exceeds your budget, then purchase at least $50,000. Do what your budget allows, but make the purchase. Be sure to discuss your insurance needs with a trusted insurance agent before making purchase decisions to see how much underinsured motorist coverage is right for you and your family. Underinsured motorist coverage is not extraordinarily expensive and is well worth the money when you, or a family member, experience the unexpected injury.
