What is Underinsured Coverage for a Waldorf, MD Auto Accident?

In Maryland, by law, all motorists are required to buy three types of insurance coverage for MD auto accidents:

• Regular hazard liability insurance
• Uninsured motorist coverage and
• Underinsured coverage

In this article, we will discuss the third type more fully, but we must understand the first two. What we are calling regular hazard liability insurance is insurance that pays the victim’s medical bills and otherwise compensates them if YOU are at fault for an accident. YOUR insurance company “writes a check” to the victim. As an example, assume there has been an auto accident here in Waldorf or elsewhere in Charles County. You obeyed the law and purchased auto insurance. You were at fault for the accident, which caused $10,000 in damages and medical bills. Your insurance will pay — on your behalf — the $10,000 (minus your deductible).

The second type of insurance that must be purchased is called uninsured coverage. “Uninsured” means “without or having NO insurance.” Generally, this relates to the driver of the other vehicle in the accident. As above, assume that there has been an auto accident here in Waldorf. You have insurance, but suppose that the other driver — who caused the accident — did not obey the law and failed to buy coverage or failed to renew auto coverage. That other driver would be UNINSURED — that is, without or having no insurance. In that kind of case, YOUR insurance company would be responsible for paying compensation for damages and injuries. YOUR insurance company would “write a check” to YOU.

Finally, the third type of coverage is called underinsured coverage. To understand this type of coverage, it must be understood that an insurance policy has limits beyond which the insurance company has NO obligation to pay. Insurance companies will have different limits for different liabilities covered by the policy. For example, one liability for a Maryland auto accident is for damage to property like a car or truck. Let’s say the policy limit is just $25,000. If you cause an accident here in Waldorf and you crash into an old rusty pick-up truck, the damage to that truck is likely less than $25,000. So, you are covered. But, assume you hit a brand new BMW or other luxury car. The damage might be more than $25,000. In that case you are UNDERINSURED. Let’s assume the total damages are $35,000. YOUR insurance company “writes a check” for $25,000, and YOU are responsible for the other $10,000.

With this in mind, then, what does it mean that YOU have to buy underinsured motorist coverage? Maryland law requires that you buy underinsured motorist coverage as part of YOUR insurance policy. This covers YOU if the at-fault driver does not have enough coverage. So, reverse the above example. Assume YOU are driving the BMW, the damage is $35,000, and the at-fault driver only has $25,000 in coverage. In that case, the other insurance company “writes a check” to YOU, and then YOUR insurance company “writes a check” to YOU for $10,000. Your insurance company will try and collect that $10,000 from the at-fault driver. But YOU are covered.

Contact Waldorf, MD Personal Injury Attorney Robert Castro Today

This article has been provided by the Law Office of Robert Castro. For more information or questions, contact our office to speak to an experienced Maryland personal injury lawyer at (301) 870-1200. We are Waldorf, MD, Personal Injury lawyers. Our address is 2670 Crain Highway, Waldorf, MD, 20601.