A single collision with an underinsured driver may turn into a financial problem that could last months or even years. Medical bills, repair costs and lost wages may add up fast, yet the at-fault driver’s policy may only cover a portion of those costs.
This situation happens more often than most people in Texas realize. When an accident leaves you with substantial losses, the other driver’s insurance might fall short of what you need to recover.
How does a coverage shortfall happen?
Standard liability policies usually cover damages only up to a set dollar limit. When the other driver carries minimal coverage or no insurance at all, your expenses might far exceed what their policy offers. Medical bills alone might reach tens of thousands of dollars, yet their settlement offer may cover only a fraction of that.
Certain coverages may help fill this gap, such as:
- Uninsured motorist coverage may apply when the at-fault driver has no insurance.
- Underinsured motorist coverage may apply when the driver’s limits do not cover your full losses.
Both coverages typically allow your own policy to step in when the other driver’s insurance falls short.
Should you consider these coverages?
Whether uninsured and underinsured motorist coverages might make sense for your situation typically depends on several personal factors:
- Your financial reserves: You may want to think about whether you have sufficient savings to cover medical expenses and vehicle repairs if an uninsured driver causes a collision.
- Your health insurance: Consider whether your current health coverage might adequately protect you in accident scenarios.
- Your driving patterns: You may want to think about how often you drive and in what areas. Higher traffic areas could potentially increase your exposure to various driving situations.
- Your risk tolerance: It might be beneficial to evaluate how comfortable you feel with assuming financial responsibility in scenarios involving uninsured drivers.
Texas law requires auto insurers to offer you uninsured and underinsured motorist coverages. If you do not want this protection, you need to formally reject it in writing.
Understand your coverage options
The coverage decisions you make could potentially affect the options available to you if a serious accident occurs. Consider taking time to review your current policy and understand what protections you have in place. Doing so might help you make more informed choices about your auto insurance.
