The Difference Between Being Uninsured and Underinsured

Written by John D. Hawkins on . Posted in , .

If you have ever been in a car accident, you understand the pain of dealing with auto insurance companies. Not only are you trying to recover from potential injuries, but you must also now deal with the back and forth required to file a car accident claim and receive deserved compensation. The whole process can be challenging, frustrating, and stressful.

Help is available, however. The experienced attorneys at HawkLaw, P.A. can help you understand what happens with your insurance after you have been in an accident and will fight on your behalf to get you the compensation you deserve, including under any uninsured or underinsured coverage.

How Does Uninsured and Underinsured Motorist Coverage Work?

When you are not responsible for an accident, seeking compensation from the other at-fault driver’s insurance company may involve several steps. In addition, the other driver may not have enough car insurance to meet your needs or claim. In cases such as this, it can quickly become problematic for you and your family.

If you are unfamiliar with how uninsured or underinsured motorist coverage works, here are the key differences and what you need to know about each.

Underinsured Coverage

Underinsured coverage provides a way for your insurance company to pay expenses incurred as a result of an accident in the event that the other person involved does not have an auto policy limit high enough to cover your damages.

The insurance policy of the at-fault driver will likely pay all the damages you or your passengers incur during the accident, but only up to their automobile insurance policy coverage liability limits. After that, your own underinsured motorist coverage may apply and cover amounts in excess of that limit. For this reason, selecting higher limits for your policy is a good option.

Uninsured Coverage

Uninsured (UM) coverage is for when hit-and-run accidents with a motor vehicle occur, or the driver of the at-fault vehicle does not have their own liability insurance.

According to studies by the Insurance Research Council, the number of uninsured drivers on the road today is one out of every eight.

Uninsured motorists’ coverage directly protects you as the policyholder. In other words, if you and/or your passengers suffer injuries in an accident and/or damage occurs to your property, this coverage pays you directly when the at-fault driver’s situation shows he or she is uninsured or the accident is a hit-and-run.

This UM coverage also breaks down into two different types, including:

  •     Uninsured Motorist Bodily Injury Coverage (UMBI Coverage)
  •     Uninsured Motorist Property Damage Coverage (UMPD Coverage)

Understanding both of these and what they provide, as well as any exclusions, is imperative to your motorist claim.

What Will Uninsured Motorist Insurance Coverage Cover in South Carolina?

In South Carolina, carrying uninsured motorist coverage is a legal requirement. This coverage must be equal to that of your chosen policy liability coverage. You can receive this coverage directly when you are hit by a hit-and-run motorist or by an uninsured driver.

The uninsured motorist property damage coverage in South Carolina covers physical damage to your insured vehicle, which may fall under collision or comprehensive coverage.

  •     Collision Coverage: Collision coverage provides for payment for physical damage to your vehicle due to the collision with objects such trees or other cars. However, if your vehicle sustains extensive damage and the repair costs exceed what’s called the threshold of the auto’s actual cash value, your insurer may determine to “total” the car instead of repairing it. When this happens, you will receive the actual cash value minus your deductible. The threshold in South Carolina is 75%.
  •     Comprehensive Coverage: Comprehensive coverage provides payment for the damage your automobile sustains from other causes, like fire, flooding, theft, vandalism, or falling objects. This insurance coverage covers broken glass, often occurring when you experience damage to your car’s windshield.

Also available in South Carolina is uninsured motorist bodily liability coverage, which provides payments for the following:

  •     Medical bills for those injuries occurring as a result of an accident
  •     Loss of income
  •     Treatment for mental and emotional issues resulting from the accident
  •     Funeral costs

What Does Underinsured Motorist Insurance Cover in South Carolina?

Uninsured driver insurance in South Carolina can cover medical costs, lost wages, funeral costs, and the treatment for emotional and mental issues that are a direct result of the accident.

In particular, underinsured motorist bodily injury (UMBI) liability coverage protects you and your passengers if you are in a crash and the at-fault driver of the other motor vehicle does not have high enough insurance coverage limits to cover your full expenses.

While you are not required by law to carry underinsured coverage and will need to sign a waiver containing a disclaimer, the benefits for doing so are numerous.

Can You Stack Your Underinsured (UIM) Coverage?

Once you exhaust your initial auto insurance policy coverage, you can stack the underinsured UIM coverage as long as one of the covered vehicles is involved in the accident.

Stacking is the process of combining the underinsured coverage you have for all your cars or trucks and becoming fully compensated for damages when you suffer serious personal injury in a vehicle accident caused by the other driver’s negligence.

For example, in South Carolina, the state minimum for bodily injury is $25,000. If you have a $25,000 uninsured coverage policy for each of your two vehicles, you can stack that coverage if needed to cover expenses. This stacking provides you with $50,000 plus the amount from the at-fault driver’s policy limits.

Do You Need Uninsured Motorist Coverage If You Have Health Insurance?

A common question often involves whether someone in South Carolina needs uninsured driver coverage if they already have health insurance. Not only is it highly recommended to have this coverage in addition to your health insurance, but it is also required. In South Carolina, you must purchase uninsured and liability insurance as a driver.

In addition to uninsured motorist coverage being a legal requirement, it can be highly beneficial to help you meet expenses for not just you but your passengers also.

Health insurance covers only your personal injuries and medical expenses and does not cover other damages such as destruction of property or injury to others.

With uninsured motorist coverage, protection is extended to your passengers and also covers damaged property. Without it, you will need to meet all health insurance deductibles, co-pays, and requirements. Any injured passengers will need to seek help under their own health policies as well. Also, any damages to your vehicle, lost wages, or funeral expenses will be your responsibility.

Can You Sue the Other Driver of the Accident in South Carolina?

There are times when you might need to take further action following a motor vehicle accident. You can sue the other driver, and the reward will be based on how much of the accident was your fault since South Carolina is a legally modified comparative negligence state.

Modified comparative negligence means that while you can recover damages, if you are partially responsible for the auto accident, a reduction for your share of negligence will occur. Your share of responsibility, however, can not be greater than that of the other involved parties.

Also, you will need to know the statute of limitations for filing a car accident lawsuit in South Carolina. The strict timeline in this state is three years, so speak with a car accident attorney as soon as possible, and avoid losing your right to sue.

See How the Attorneys at HawkLaw, P.A. Can Help You After an Accident

Dealing with auto insurance companies following an accident can be challenging and stressful. You may not understand what coverage you have and what you are entitled to entirely. The attorneys with HawkLaw, P.A. can help you get through this difficult time and will diligently fight for the full compensation you need and deserve.

Call 1.888.HAWK LAW today to speak to a member of our client engagement team or send a message online and schedule your free consultation.*

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Written By John D. Hawkins


John David Hawkins is the Founder and Owner of HawkLaw. He has been licensed to practice law in South Carolina since his graduation in 1994 from the University of South Carolina School of Law. Focusing on litigation, Mr. Hawkins is experienced handling Worker’s Compensation, Personal Injury, Social Security Disability, Administrative Law, and Criminal Law matters.

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