Car Insurance: UIM Coverage

underinsured motorist coverage


Car insurance buyers must make sure to purchase enough underinsured motorist coverage. Otherwise, you may not be compensated for accident injuries.
Car insurance purchasers have many coverage options to select. Below is a brief guide to underinsured motorist UIM coverage. The guide is culled in part from a recent court case.

When you buy car insurance, UIM coverage is optional. It insures you against the possibility of injury caused by a driver whose insurance coverage is insufficient to pay for all injuries you suffer.

New Jersey’s UIM coverage law allows you to purchase as much UIM protection as you feel you need. The principle of UIM coverage is to put you in as good a position as if the responsible driver possessed an amount of liability insurance equal to the UIM coverage amount you select. The required availability of UIM coverage for all insureds reflects New Jersey’s interest in providing compensation to resident motorists for injuries sustained in accidents with underinsured motorists.

underinsured motorist coverage

There are special rules for calculating UIM benefits. These rules require exhaustion of all available coverages and the offsetting of any recoveries received.

In other words, the amount of liability coverage the other driver has is deducted from what you can be paid under your UIM policy. Say you are severely injured in a car accident. The other driver was at fault. Imagine that the other driver has $15,000 in car insurance liability coverage, you feel your case is worth $100,000, and you purchased $50,000 in UIM coverage.

You could then recover $15,000 from the other driver’s car insurance policy, and $35,000 from your UIM policy. In total, you could recover $50,000. Had you purchased $100,000 or more in UIM coverage, you could have recovered the full $100,000.

In short, when your car insurance renews, you should buy as much UIM coverage as you can afford. You never know when you might need it. Consult the materials that come with your car insurance renewal for a fuller explanation of UIM benefits.


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