Underinsured Motorist Coverage is insurance that you purchase. When you bought your auto insurance, you purchased a package of insurance coverage. By law, that package must include liability insurance and Personal Injury Protection Coverage. You have the option of purchasing additional insurance. Even though the additional insurance is optional, almost everyone gets it. In Utah, everyone must purchase underinsured motorist coverage unless specifically waived in writing. People sometimes refer to it as UIM coverage.

What the insurance coverage does for you is it protects you if you are in a crash that is the other driver’s fault and the other driver has inadequate insurance.

Before you can collect under-insured motorist coverage you must meet a few qualifications:

  1. Your injury must be so sever that the liability coverage is inadequate;
  2. You must comply with the policy provisions in the under-insured motorist policy;
  3. You must give your own insurance company notice of the liability settlement and give your insurance company the option of paying it (a Utah statute gives specific details on how to do this); and
  4. You must convince your own insurance company that you are eligible for the benefits.

In trying to convince your own insurance company that you are eligible, your own insurance company will start acting like it is the insurance company for the at fault driver. Your own insurance will likely argue that your injuries aren’t that bad, that the accident wasn’t the other driver’s fault. It can be disturbing to have your own insurance company bring those defenses. Even so, they almost always do.

Ultimately, if you can prove them wrong, they must pay. The amount they are required to pay depends on several things. First, it depends on how serious your injuries are. Second, it depends on the policy limits of the at fault driver. By law, your own insurance company need only pay the difference.

Here is an example. If you are injured and your case is worth $120,000 and the at fault driver has only $50,000 in coverage, you will first collect the $50,000. Then you can make a claim against your own insurance company for up to $70,000 ($120,000 minus $50,000 already paid). If the policy limits are $50,000, your own insurance company wiill pay you $50,000. Unfortunately, that is not enough to fairly compensate you for your $120,000 injury. The lesson here is that you should make sure that you have adequate under-insured motorist coverage.