Insurance can be confusing! We have found that one of the more confusing types of coverage for auto insurance is Uninsured and Underinsured coverage. In Massachusetts Uninsured coverage is compulsory with limits of $20,000/$40,000 and Underinsured coverage is optional. From our experience we feel that limits of $100,000/$300,000 should be the minimum to carry for both Uninsured and Underinsured coverage (Parts 3, 5 and 12 of your auto policy should all be the same, so we recommend the $100,000/$300,000 limits for all three parts).
The Uninsured and Underinsured limits can cover: medical expenses, pain and suffering and lost wages. Consequently, the higher limits are recommended.
If another driver hits and injures you and does not carry auto insurance your limits of $100,000/$300,000 for Uninsured coverage will apply. Medical costs quickly add up and you don’t want to end up paying out of pocket. If you are out of work for an extended period of time these higher limits will allow you to collect sufficient wages that would otherwise be lost with low limits.
If another driver only has low limits such as $20,000/$40,000 for Bodily Injury and he/she causes the accident you may not receive enough money to cover the injuries you sustained. Once again the medical costs and lost wages will most likely exceed $20,000/$40,000 limits. Therefore, your coverage would apply after their limits were met – Underinsured coverage.
You are involved in a hit and run accident, then your Uninsured coverage limits will apply if someone sustains bodily injury. The state minimum limits of $20,000 may not be sufficient.
Uninsured and Underinsured coverage is relatively inexpensive, so it is wise to increase Bodily Injury Coverage in the event of a major accident caused by another vehicle with no or little coverage.
We hope that you now have a better understanding of how Uninsured and Underinsured coverage works and what limits are best for your protection. If you have any further questions, please call us! www.mancuso-nowak.com.