Why do I need uninsured or underinsured motorist coverage?

An estimated 9% to 11% of drivers in South Carolina drive without carrying any automobile insurance,  according to various studies. Vehicle insurance is required by South Carolina law, but a significant people of number drive without it.

Nationwide, the rate of uninsured drivers was 13% in 2015. Uninsured motorist rates varied substantially among individual states, ranging from 4.5 percent in Maine to 26.7 percent in Florida, according to the Insurance Research Council.

Uninsured motorist coverage protects you and relatives who live with you.  If you are in a car wreck in which the at-fault driver has no insurance, you can turn to your own policy to pay your medical expenses, lost income, pain and suffering, and other injuries and damages. By law, your policy includes $25,000 of uninsured motorist coverage if one person is injured and $50,000 of such coverage if two or more persons are injured.

Underinsured motorist coverage is an insurance policy that provides additional coverage to you and relatives who live with you if you get into an accident with a driver who does not possess enough insurance and cannot provide enough compensation for your medical expenses and damages. Typically, your insurance will cover the difference between the amount the other driver’s insurance pays out and the amount of coverage in your policy.

For example, assume the at-fault driver only carries only minimum coverage of $25,000, but your medical bills, physical pain and suffering, emotional distress and other damages are $150,000 or more. If you have underinsured motorist coverage of $100,000 under your own vehicle’s policy, then you may recover $25,000 from the at-fault driver’s policy and $100,000 from your policy.

You also may be able to “stack” the underinsured motorist coverage from policies on other vehicles that you own, which gives you additional coverage. Whether you can “stack” the additional coverage is a complex issue and you should consult a lawyer to ensure your rights are protected.

Remember this crucial distinction: Liability coverage is paid to the other driver when you are at fault in a wreck, so it “protects” the other driver although it also protects your assets from a lawsuit. However, uninsured and underinsured motorist coverage is paid to you or your family when the at-fault driver injures you or your loved ones.

The insurance company is required to make you a meaningful offer of underinsured motorist coverage with various limits up to the amount of your policy’s liability limits and, if it fails to do so, the policy may be reformed by law to provide such coverage. However, underinsured motorist coverage is not mandatory in South Carolina, so make sure you have a sufficient amount of this coverage on all your vehicle policies.

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