Insuring for the Underinsured and Uninsured

Auto Insurance

Although most states have mandatory liability insurance requirements, one in six drivers still manage to roam the streets without owning any insurance. The even larger problem is the number of drivers who only purchase the minimum liability coverage, of which there are tens of millions.

For instance, in Virginia, the minimum liability limits are 30/60/20 - $30,000 for the injury or death of one person, $60,000 for the injury or death of two or more people, and $20,000 for property damage.

For example, say Joe is driving his business colleagues in his brand new SUV one evening and a driver covered only with minimum liability runs a red light and rams his passenger side at 40 miles per hour. His passengers sustain serious injuries and must be air-lifted to a hospital. Joe suffers a broken collar bone and cuts when the front and side airbags are deployed. His $50,000 SUV is a total loss.

Joe's passengers both suffer spinal injuries which will require extensive treatment and rehabilitation after they undergo surgery. Their medical bills will exceed $300,000, and Joe's medical costs will come in at $20,000 for total bodily injuries of $320,000. His SUV is headed for the scrap heap but his outstanding loan of $40,000 lives on. The at-fault driver's insurer will cover $60,000 for the bodily injury costs and $15,000 for property damage leaving Joe with a $260,000 bodily injury liability and $25,000 outstanding balance on his auto loan. His liability would be even greater in many states that have even lower liability limits.

Purchasing enough UM/UIM motorist coverage under your auto policy is extremely important to protect yourself in accidents. However, most people are unaware of the fact that UM/UIM coverage protects them in or out of their cars. If a negligent, uninsured driver clips you or any of your family members while riding a bike or stepping off a curb, your UM/UIM coverage will kick in.

You can also purchase excess UM/UIM coverage on some umbrella policies. Talk to your Towne Insurance Risk Advisor today to be sure you have the coverage you want and need.

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