Under Insured insurance coverage will cover you for the difference between your actual damages, and the at fault persons insurance coverage.
In other words, let say you are hit by a person who has minimum insurance coverage, (10k/15k/30k) who is at fault in the accident. Under normal circumstances the most you will be able to recover from their insurance company is for your injuries, and out of pocket loss, etc., is $15,000.00. Let’s say your actual medical bills and out of pocket loss is $100,000.00 (This does not include the other non-out of pocket damages you are entitled to!). What are you going to do?
If the person who hits you does not have any assets there is little chance that you will ever collect the $85,000.00 difference from them if you sue to get a judgment. If you do get a judgment, they could declare bankruptcy and discharge the debt they owe to you in its entirety.
We find that in many instances, an at fault persons coverage is not enough to cover our client’s actual damages and they get stuck in the catch 22 situation discussed above.
We believe that it is always better to error on the side of caution. We always recommend purchasing Under Insured Coverage for a minimum of $100,000.00 or more. The more the better. This is your way of insuring yourself, against an at fault persons deficient coverage.
By Norman Gregory Fernandez, Esq. , Copyright 2006
