What is underinsured motor vehicle insurance and how does it benefit you?

Nancy Salley • February 9, 2017

Underinsured motor vehicle insurance is an additional coverage that you can purchase to protect you and your family when you have been injured by another driver. Salley Law Firm, P.A. explains.

Underinsured motor vehicle insurance is an additional coverage that you can purchase to protect you and your family when you have been injured by another driver. It is meant to help compensate you for your injuries when the at the fault driver’s liability coverage is insufficient to fully compensate you for your injuries and damages. S.C. Code Ann. § 38-77-160 requires that your insurance carrier offer you underinsured coverage when you purchase your vehicle insurance. This coverage is usually low cost compared to the overall expense of your insurance policy.

The minimum required liability coverage in South Carolina is $25,000.00 per person or $50,000.00 per accident, per S.C. Code Ann. § 38-77-140. This is the standard liability coverage carried by the majority of drivers on South Carolina roadways. This means that $25,000.00 is the most that one injured individual can get from the liability insurance carrier for an accident and the most the liability carrier will pay is $50,000.00 for one accident, no matter how many people are injured or how badly. So what happens if you are hit by a driver carrying the minimum limits required by law but your damages are more than $25,000.00 or there are so many people injured that your portion of the $50,000.00 does not fully compensate you.

That is when you look to your underinsured motorist coverage. To give you some examples:

EXAMPLE 1: You are hit by a driver carrying the minimum limits. Your medical bills are $40,000.00. The liability insurance carrier will only have $25,000.00 to pay you. This will leave you short $15,000.00 for the medical bills and you have received nothing for your pain and suffering. Unless the at fault driver has personal assets sufficient enough to pursue, you will have no other means to be properly or fully compensated for your injuries and damage. If you have purchased underinsured coverage equal to the required minimum liability limits, you will have an additional $25,000.00 to pursue to compensate you for your medical bills and pain and suffering.

EXAMPLE 2: Another driver injures you and three other people in an accident. You and the other three injured people have similar injuries and medical bills of about $15,000.00. The at fault driver carries the minimum limits of $50,000.00 per accident. This would be insufficient to fully cover the $60,000.00 of medical bills for everyone injured by the at fault driver. The liability insurance carrier would likely offer a pro rata portion of the coverage to each person injured. If it was an equal distribution, you would receive $12,500.00 as compensation. Again, if you have purchased underinsured coverage equal to the required minimum liability limits, you will have an additional $25,000.00 to help compensate you for your medical bills and pain and suffering.

Underinsured motorist vehicle coverage can be purchased in varying amounts and offers greater protection to you and your family if you or they are severely injured by another driver. You should check your policy to see if you have this coverage. You should seriously consider adding this coverage to your policy if you do not currently have it. The low overall expense of adding underinsured coverage will be more than justified if you or a family member is severely injured by another driver.

If you would like to speak to one of our attorneys about how underinsured motorist coverage works or have been injured in an accident, please do not hesitate to call Salley Law Firm, P.A. in Lexington, SC at 803-356-5000 or toll free at 1-800-321-6125.

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