Here is a huge difference between Uninsured Motorist Coverage and Underinsured Motorist Coverage. Understanding this difference can affect how you deal with the aftermath of an automobile accident.
Uninsured Motorist Coverage (UM), protects you in an accident involving an at-fault driver who isn’t insured. Although most states, including California compel drivers to carry insurance, not everyone does. In fact, around 12 % of motorists do not have insurance. UM coverage will also protect you when you get involved in a hit and run incident, and are unable to identify or locate the at-fault party.
Underinsured Motorist Coverage (UIM) protects you in cases where the damages or medical expenses exceeds the limit of at-fault driver’s insurance.
The minimum coverage required by California law is only $15,000 per person or $30,000 per incident. This means that, although they are insured, people who avail of the minimum plan required by law are still underinsured. For example, you get into a car accident and sustain some injuries. Treatment for the injuries cost you $20,000, and the other (at-fault) driver is insured but only for $15,000. Underinsured Motorist coverage will cover that $5000 difference. This means that almost any accident can have UIM applied to it.
Important note: For car repairs, you must carry insurance that has property damage as part of its coverage.