April 9, 2013 7:40 pm 

Did you know the minimum amount of insurance required in the State of Nebraska is $25,000 per individual and $50,000 per accident? For this reason it is very important to understand what Underinsured and Uninsured coverage on your auto policy means and how it can help you. You never know who will hit you and what their insurance coverage will be.

First, uninsured motor vehicle means a motor vehicle with no bodily injury liability insurance or bond applicable at the time of the accident.

Second, underinsured motor vehicle means a motor vehicle with not enough bodily injury liability insurance or bond applicable at the time of the accident.

Let’s look at some examples to put this into perspective.

EXAMPLES

Example 1

Driver 1 and Driver 2 are involved in a car collision. Driver 2 is at fault.  Driver 2 has no automobile insurance or ran off after hitting you.  Driver 1 incurs damages due to the collision. Driver 2 is therefore considered uninsured.  Driver 1 can make an uninsured claim, if they have uninsured coverage, against their own auto insurance policy to cover the damages.

Example 2

Driver 1 and Driver 2 are involved in a car collision. Driver 2 is at fault.  Driver 2 has the minimal auto insurance coverage in Nebraska which is 25/50/25 (Meaning $25,000 per person per accident, $50,000 per accident bodily injury, and $25,000 per accident property damage).  Driver 1 incurs damages totaling $75,000 due to the collision, which exceeds Driver 2’s coverage. Driver 2 is therefore considered underinsured.  Driver 1 can make an underinsured claim, if they have underinsured coverage, against their own auto insurance policy to cover the remaining damages.

In summary, as you can see from the examples above, it is very important to have Uninsured and Underinsured coverage on YOUR auto policy to protect yourself from others who do not have adequate insurance! If Driver 1 did not have Uninsured or Underinsured coverage he/she would not have been able to collect for the full amount of their damages.  Therefore, check your auto insurance policy and determine if you have Uninsured or Underinsured coverage and if it is sufficient.

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This post was written by Timothy R. O'Brien