Uninsured vs. Underinsured Motorist Coverage: What’s the Difference?
Understanding the difference between uninsured and underinsured motorist coverage is an important part of your auto insurance policy.
In Wisconsin, uninsured motorist coverage is required, while underinsured motorist coverage is optional. Both protect you if you are injured in an accident caused by another driver, but they apply in different situations.
What Is Uninsured Motorist Coverage?
Uninsured motorist coverage applies when the at-fault driver has no insurance.
For example, if you are hit by a driver who does not carry insurance, your uninsured motorist coverage helps pay for your injuries and related costs, up to your policy limits.
This coverage is required in Wisconsin and helps protect you from drivers who are not properly insured.
What Is Underinsured Motorist Coverage?
Underinsured motorist coverage applies when the at-fault driver has insurance, but not enough to cover the full cost of injuries or damages.
For example, if the other driver only carries minimum limits, those funds may be exhausted quickly in a serious accident. Underinsured coverage can then help cover the remaining costs, up to your policy limits.
Why It Matters
Medical expenses from a serious accident can add up quickly. If the other driver has little or no coverage, you could be left with significant out-of-pocket costs.
Uninsured and underinsured coverage can help protect you from:
- Medical expenses beyond the at-fault driver’s limits
- Lost income due to injury
- Other financial impacts from an accident
Health insurance may cover some medical bills, but it does not typically cover lost wages or other damages.
Is Underinsured Coverage Worth It?
While underinsured motorist coverage is optional, it can provide an additional layer of protection. Many drivers carry only minimum liability limits, which may not be enough in a serious accident.
This coverage is often available at a relatively low cost and can sometimes be extended through an umbrella policy for added protection.
Final Thoughts
Having auto insurance is important, but understanding what your policy covers is just as important. Reviewing your uninsured and underinsured coverage can help ensure you are fully protected on the road.
If you have questions about your policy or want to review your coverage, contact G2 Insurance Services at (262) 784-0644.