Even though vehicle owners may think they have enough auto insurance coverage to protect them from just about any eventuality, it should be pointed out that nearly 14 percent of motorists are uninsured. (The percentage varies widely from state to state.) Fortunately, auto policy holders may avail themselves of “uninsured coverage,” which pays for damage to their cars and passenger injuries caused by an at-fault driver who has no liability insurance or who hits and runs. In addition, “underinsured coverage” comes into play when the policyholder’s damages are greater than the other driver’s liability limit. Otherwise, it might kick in when the other driver has insurance that does not meet state-mandated minimum liability requirements.
NOTE: Underinsured protection may prove very valuable in cases in which the other driver’s insurance company denied his or her claim or was not financially able to pay it.