What is the trigger for the underinsured motorist coverage limits?
The underinsured motorist coverage limitations trigger is one of the two that an insured party may select to protect themselves from losses brought on by an accident involving a driver who has insufficient insurance.
When an underinsured driver’s liability limit is less than that of the insured person or policyholder, the underinsured motorist coverage limitations trigger guarantees coverage in the case of an accident brought on by a driver with insufficient insurance. The damages or coverage trigger is the alternative underinsured motorist coverage trigger.
Recognizing the Trigger for Underinsured Motorist Coverage Limits
There are several reasons why drivers get auto insurance, including the possibility that their vehicle could be involved in an accident and cause damage to someone else’s vehicle or that they might kill or seriously hurt someone else. However, one risk that drivers occasionally ignore is the possibility that another driver who doesn’t have enough auto insurance could hurt them or cause damage to their vehicle.
In such a case, the insured may be able to hold the at-fault driver accountable but not be able to recover damages. After all, the at-fault motorist may easily file for bankruptcy if they lack the required assets or insurance, leaving little to nothing for the victim to recover.
Drivers may add underinsured motorist coverage to their vehicle insurance policy to guard against this danger. This additional insurance protects against property loss, policyholder physical harm, and injury to passengers or family members who are covered. The endorsement may pay the difference between the entire amount owed and the coverage covered by the at-fault driver’s insurance if a claim has to be submitted.
Uninsured vs. Underinsured Motorist Protection
It should be noted that uninsured motorist (UM) coverage, which would pay for a scenario where the at-fault driver has no insurance, is distinct from underinsured motorist coverage. These two kinds of coverage are often combined, however. They provide helpful coverage and are often a reasonably priced addition to a vehicle insurance policy, independently or in combination.
The Insurance Research Council keeps track of data on drivers and estimates that in 2015, one in eight drivers lacked adequate insurance. 2. Being uninsured is prohibited in some states. In actuality, it is against the law to drive without vehicle insurance in every state except New Hampshire. It is preferable to have underinsured coverage.
Illustration of a Trigger for Underinsured Motorist Coverage Limits
Assume an insured individual has limit-triggered underinsured motorist coverage up to $500,000. Due to the limitations trigger, the policyholder’s underinsured motorist coverage would kick in with an insurance claim of $150,000 in the case of an accident involving an at-fault driver who only has $100,000 in insurance coverage.
Conclusion
- The underinsured motorist, whose coverage limitations trigger, ensures insurance coverage for damages caused by an at-fault driver without sufficient vehicle insurance to pay the other injured party’s losses ultimately.
- This kind of coverage may be helpful in the event of an accident and is a reasonably cheap addition to a standard vehicle insurance policy.
- Many states need underinsured motorist endorsements, usually lasting six to twelve months.
