FAQ: What’s the Difference Between Uninsured and Underinsured Motorist Coverage?

by Tim O’Hare

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In the state of Texas, it is illegal for a driver not to carry liability insurance, at a minimum. Unfortunately, the laws do not keep some drivers from driving without insurance. The Insurance Research Council estimates that drivers in the U.S. have a 14 percent chance of being involved in an accident caused by an uninsured driver.

Insurance terms can be confusing at times. When it comes to insurance coverage, there are two terms you should understand, in the event you are in a car accident: underinsured and uninsured. What do they mean and what’s the difference?

The term “underinsured motorist” refers to a driver of a motor vehicle who carries an amount of liability insurance not sufficient to cover the damages he or she causes in an accident.

The term “uninsured motorist” refers to a driver of a motor vehicle who is not carrying liability insurance, or to an unidentified driver of a hit-and-run accident. It can also refer to an insured driver whose insurance has denied coverage for some reason. According to the Texas Department of Public Safety, about 25 percent of the state’s 17 million licensed drivers do not carry liability insurance.

In Texas, motorists who are caught driving without liability insurance can be fined on their first offense. Consecutive offenses could result in suspension of their driver’s license. In some cities, including the City of Dallas, uninsured drivers can have their car towed.

Because not all drivers carry liability insurance, despite laws requiring them to do so, the Texas Insurance Code mandates that all insurance companies doing business in Texas must offer uninsured and underinsured motorist protection. Simply put, drivers who do have insurance are covering uninsured and underinsured motorists with their policies when they take out Uninsured/Underinsured Motorists coverage (also known as UM/UIM coverage.)

Uninsured and underinsured motorist insurance coverage applies to the policyholder and any family members residing in the same household, as well as passengers in the insured vehicle and anyone driving the insured vehicle with the owner’s permission. Uninsured and underinsured insurance coverage (UM/UIM) does not apply to vehicles owned by the policyholder that are not listed on the policy.

If you have been injured in an accident caused by an uninsured or underinsured motorist, don’t expect your insurance company to do you any favors. Your insurance company will do everything it can to lessen the amount they pay to you, and insurance companies regularly tell people they are being paid what is “fair,” and frequently their definition of “fair” is far different than what most juries and policyholders would describe as fair.

In the event of injury or the unfortunate event of death in a car accident, working with a trusted personal injury attorney will ensure you receive all compensation due to you.  If you have been injured in a car accident, or have lost a loved one in a wreck, call us. The experienced legal team at The Law Offices of Tim O’Hare will guide you through your case and ensure you get everything you deserve.

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