Most states have laws that provide underinsured motorist ("UIM

Most states have laws that provide underinsured motorist ("UIM") insurance, which allows the person covered by the insurance policy to recover damages if involved in an accident and the driver responsible for those injuries doesn't have enough insurance coverage.
There can be very significant differences in the UIM policies that are written by the various insurance companies and by state. In some states, UIM must offer it to their customers and car owners must carry it. In other states, UIM coverage is optional, or coverage applies unless the insured specifically rejects it.
In addition, the state UIM laws differ on when UIM coverage is used. In some states, the insured's coverage is triggered based upon terms in the insured's policy, and in some states it's based upon the policy of the driver who caused the injury.
It is critical that you understand the differences in UIM state laws and the differences in policy types. Contact an experienced insurance law attorney for additional information.

Getting or Having UIM Coverage

In states that require UIM, insurers are required to provide coverage unless you specifically reject it. Most laws set a minimum and maximum amount of coverage needed in the policy.
You may also purchase extra UIM insurance in addition to the amount you're already covered for in the basic policy, but only up to a certain amount.
Optional Coverage
Some states don't require UIM and it's an option, however, state laws say that it has to be made available to you. These laws say that insurance companies might have to provide:
  • A written notice of the availability of UIM insurance
  • An offer for coverage when you apply for insurance, and
  • Insurers have to offer UIM when it offers uninsured motorist insurance to its customers
Automatic UIM Coverage
In most states UIM coverage is automatically included in your general car insurance policy unless you specifically reject it.
Most of the laws require that you reject UIM coverage in writing and some states require that you sign a separate agreement declining the additional coverage.
If coverage hasn't been rejected according to state law procedures, the courts will assume that you have it.

What's Not Covered

UIM coverage is triggered when your damages are more than the insurance policy of the person at fault in the accident will pay. "Exclusions" are specific things or persons that are not covered by an insurance policy. With respect to UIM coverage, the UIM laws allow insurers to make certain exclusions.
For example, UIM law often include an exclusion for government vehicles or an exclusion for claims involving an uninsured vehicle you own, or an uninsured vehicle owned by your spouse or member of your household.
In addition, insurers often make other exclusions in the policy. UIM policies often contain exclusions that bar:
  • coverage of an vehicle if the uninsured motorist insurance can provide coverage for the accident (check with your state because states may vary on their enforcement of this exclusion)
  • coverage if you're injured by a vehicle you own, owned by a spouse or family member not listed in your insurance policy

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