Personal Injury: UIM/UM, AKA Your Savior from an Insurance Nightmare
Being involved in a car accident can really shake up your life, literally. You are injured, have medical bills, and your car will need repairs before you can drive it safely again.
Adding an uninsured or underinsured motorist to the game and your result is a never-ending headache and needless stress. However, by making some choices on your auto insurance policy, you may increase your options and alleviate that stressful scenario.
Difference Between Uninsured Motorist and Underinsured Motorist Policy
Uninsured Motorist (UM)
An uninsured motorist is someone driving without any auto insurance. It is important to note that driving without insurance is illegal in the state of Colorado, but it still happens. An uninsured motorist policy can also apply to a hit and run, where the at-fault driver flees the scene before insurance information can be exchanged. In other words, you are unable to file a claim against their insurance provider, even if they do have an insurance policy. For instance, if your car is parked on the street and you wake up the next morning to your car having been hit, you would have a claim for your uninsured motorist policy to cover the damage.
Underinsured Motorist (UIM)
An underinsured motorist is someone who does have auto insurance, BUT their policy is limited, and will not cover your total costs/damages. A common scenario: the at-fault driver may have $25,000 bodily injury limits on their policy, which is the amount of coverage permitted by Colorado law, but your damages are $100,000. The at-fault driver's insurance will NOT be able to fully pay for your damages, leaving you to cover the remainder of the bill.
Why does the distinction matter?
In short, an uninsured motorist is breaking the state law, so your involvement in a car accident with them can become more complicated and you may find it very difficult to get compensated by them.
Whereas, while an underinsured motorist will NOT be able to give you the full compensation you need or deserve, at least a portion of your damages will be reimbursed.
Keep in mind - Colorado law specifically prohibits your insurance company from increasing your rates for using your UM/UIM policy. For them to do so, it is both illegal and acting in bad faith.
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