What Being Under Insured On An Auto Insurance Policy Means

It seems like everyday were driving down the road, and we see a distracted driver on their phone, or playing with MP3 player. We also have the mad or late drivers, who are speeding or tailgating to get to where ever they need to go. Some people are just unsafe drivers and one way we protect ourselves against them is our auto insurance.  That is why having a certain amount of liability and under insured motorists coverage can be so important.  In this blog we are going to be focusing on under insured motorists coverage. This is not to be confused with uninsured motorists, even though uninsured motorists and under insured motorists are sold as the same coverage.

At what level are you considered under insured on a car policy?

In most states the department of insurance is the one to determine what being under insured is. This is calculated and based on certain factors. In Colorado, to not be considered under insured, would mean carrying at least 100/300 in liability. Or in other words, $100,000 per person, and $300,000 total per accident. If you carry anything lower such as 50/100 or the state minimum limit which is 25/50, you are considered under insured. These lower limits do have serious gaps in coverage.

Why having an auto insurance policy, that is considered under insured is bad

Accidents can be a life changing event for both parties. If you are considered at-fault in an accident, and only have 25/50 or $25,000 per person and $50,000 per accident, this is most likely not going to be enough for the 3rd party you just hit. 100/300 has and provides a lot more coverage. Anything higher than 100/300 is always going to be a recommended. These higher limits could include, 250/500, 300 CSL and 500 CSL. (Combined Single Limit)

How can I protect myself against under insured motorists?

Make sure that you have enough under insured motorists coverage on your vehicle policy. Also carry as much under insured motorists coverage as possible. This will fill the gaps of coverage, that an under insured motorist wouldn’t have.  It’s also a good idea to add under insured motorists coverage to your personal umbrella if you have one.

According RMII, about 1 out of every 6 people in Colorado drive with out insurance. Overall uninsured motorists cost consumers about 11 billion dollars per year. On top of that there are a lot of consumers who just buy the state minimum liability requirements.  If you have any questions about your policy and under insured motorists, feel free to contact us. Thanks For Reading!