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Worries about underinsured motorists on the road

On Behalf of | Dec 28, 2021 | UM/UIM Coverage |

Not every Minnesota driver carries a decent amount of liability insurance. Carrying the state minimum might provide some level of financial protection, but an underinsured negligent driver could cause a disastrous accident that inflicts tremendous losses on the victims. Those worried about underinsured drivers might have concerns about protecting themselves financially if an accident occurs.

Financial protections against underinsured drivers

Preventive steps could establish a financial safety net against underinsured drivers. Such steps may be worth considering since about one-third of all drivers in the United States fall under the category of uninsured. Insurance companies only pay to the policy limits. So, if the driver only carries $50,000 in liability insurance and the damages are $75,000, the remaining $25,000 falls on the negligent driver’s shoulders.

If the driver does not have assets in a sufficient amount, the victim may discover a lawsuit wouldn’t recover anything. Taking out underinsured/insured motorist coverage on one’s own policy could provide a way to recover the additional funds. Such coverage addresses the other driver’s lack of adequate insurance.

Lawsuits and underinsured drivers

While many underinsured motorists might possess limited assets, some may have more than expected. If an investigation reveals the negligent driver has substantial assets, such as a home, filing a lawsuit could make sense. That said, if the victim has underinsured motorist coverage, filing a lawsuit might be unnecessary.

Unfortunately, a policyholder could run into problems with an insurance company. When the company attempts to lowball a settlement or otherwise engage in bad faith, suing the insurance company may become necessary.