When you set up a new car insurance policy in a new state, one of the easier ways to build your policy is to match what you had in your old state. However, there's one type of coverage that you may want to add if you didn't have it already: underinsured motorist coverage. This is coverage that takes over if someone causes an accident but doesn't have enough coverage to take care of all of the costs stemming from the accident. In other words, if someone gets into an accident with you, and it's their fault but they have inadequate coverage, you may end up having to pay for part of your repair costs yourself, unless you have coverage that pays it for you.
State Minimums Are Just That
Many people have only the state minimum insurance amounts, and these amounts are meant to cover the majority of common repairs after accidents. But they often don't cover everything, and if the accident is severe, or if the repair costs for your model of car are on the higher end of the scale, the state minimums for insurance are near-inadequate. And even if someone has more insurance than just the minimum, the cost of the accident can still exceed that coverage.
Underinsured Isn't the Same as Uninsured
Note that underinsured people do have insurance, and the amount they have may be totally legal. They are not uninsured at all, and thus the costs stemming from an accident with them won't be covered by your uninsured motorist coverage. Still, the level of insurance they have may make it seem like they didn't have coverage at all once the policy pays out.
Adding Coverage Usually Isn't Expensive
Adding underinsured coverage usually isn't that expensive. The exact cost varies by location and several other factors, but don't let the idea of paying more for this coverage turn you off. That small bump up in premiums could save you several hundred or even thousand dollars down the road.
You May Need More Than One Addition
When you speak to your insurance agent about adding underinsured coverage, verify if you need just one general addition to your policy, or if there are separate coverage categories for liability, collision, and so on. Sometimes the underinsured coverage is split into different riders.
Your insurance agent, as well as companies like Affordable Insurance, can give you more information on how the coverage works and what exactly happens when you need to use it. This is a coverage worth getting because having low insurance coverage is rather common.