How does Underinsured Motorist Coverage Work?

A lot of people have underinsured motorist coverage – commonly called UIM – but they don't know exactly how it works.

UIM provides a "floating layer" of coverage on top of the liability insurance carried by the driver who caused the wreck.

Here's an example:

The driver who caused the wreck has $100,000 of liability coverage. But that's not enough because your damages are $375,000.

The good news is that you have a $500,000 UIM policy. So the insurance company for the negligent driver pays his $100,000 limit. Then your UIM carrier pays the additional $275,000.

This may be a slight oversimplification, but it gives you a pretty good sense of the mechanics.

If it doesn't cover all your questions, let us know. We're happy to answer them.