What is ‘Underinsured Motorist Coverage Limits Trigger’
One of the two triggers that can be specified by an insured party to protect against losses caused by an accident with a driver who has insufficient insurance. The underinsured motorist coverage limits trigger ensures that in the event of an accident caused by a driver with inadequate insurance, the underinsured motorist coverage comes into effect when the underinsured driver’s liability limit is lower than that of the insured person or policy holder. The other trigger for underinsured motorist coverage is the damages trigger.
Explaining ‘Underinsured Motorist Coverage Limits Trigger’
For example, assume an insured person has underinsured motorist coverage up to $500,000 with a limits trigger. In the event of an accident with an at-fault driver who only has $100,000 of insurance coverage, an insurance claim of $150,000 would result in the policy holder’s underinsured motorist coverage kicking in because of the limits trigger.
Underinsured Motorist Coverage Limits Trigger FAQ
What is stacked limits of underinsured motorist coverage?
Stacked car insurance raises your uninsured and underinsured motorist coverage. You can either combine — or “stack” — the limits of multiple cars under one policy or across policies. This increases your total amount of coverage to receive full payment for your injuries and/or property damage.
Will my underinsured motorist coverage cover pain and suffering?
Yes, your underinsured policy can cover damages for pain and suffering. However, your policy amount determines your insurance coverage. It means if you have just $50,000 in underinsured motorist protection, that’s the amount your plan will pay out for your total damages (including pain and suffering).
What triggers uninsured motorist coverage?
An uninsured motorist has no auto insurance. Uninsured motorist coverage pay for damages caused by a driver with no car insurance. If you’re hurt or your car is damaged in a crash caused by such a driver, this coverage will pay for costs, up to the limits in your policy.
How much uninsured motorist coverage should I carry?
Determine the amount of uninsured motorist coverage you should purchase by checking to see if your state requires it. For states requiring it, the typical minimum amount of coverage is $25,000 per person and $50,000 per accident.
What states require UM UIM coverage?
The fourteen states requiring underinsured motorist coverage (UIM) are: Connecticut, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oregon, South Dakota, Vermont, Virginia, and Wisconsin.
Why would you reject uninsured motorist coverage?
The uninsured motorist policy will go into effect after being in an accident caused by an uninsured driver. Rather than buying insurance to protect other drivers from you, you’re buying insurance to protect yourself from bodily injury damage caused by other drivers.
How do I sue for underinsured motorist?
You have two options in an accident with an uninsured driver:File a legal claim (i.e. personal injury lawsuit) against the driver. Claim uninsured motorist benefits from your own insurance company.
Further Reading
- On the UM/UIM Racetrack-General Assembly Takes the Wheel in Auto Insurance Debate – heinonline.org [PDF]
- The effect of legal rules on the value of economic and non-economic damages and the decision to file – link.springer.com [PDF]
- Settlement at policy limits and the duty to settle: Evidence from Texas – onlinelibrary.wiley.com [PDF]
