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What You Need To Know About Adding Uninsured/Underinsured Motorist Coverage To Your Auto Insurance

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When purchasing an auto insurance policy, you will be asked if you wish to accept or decline uninsured/underinsured motorist coverage. All too often people choose to automatically decline this coverage in the hopes of securing a lower monthly insurance payment. However, while it is true that your policy will cost a bit more when including this type of coverage, the fact is that choosing to add this type of coverage to your policy can prove very important. Below you can learn more about why you should seriously consider adding uninsured/underinsured motorist coverage to your auto insurance policy.

Collision Coverage Will Not Take The Place Of Uninsured/Underinsured Motorist Coverage

Many people simply assume that they will be able to use their collision coverage to cover the cost of any damages to their vehicle regardless of whether the other driver has insurance or not. However, the fact is that collision coverage is only designed to cover repairs to your vehicle if you are at fault for causing the accident that resulted in the damage to your vehicle. If the other driver is found to be liable for the accident, your collision coverage will not cover the cost of repairing your vehicle. If that other driver does not have liability coverage, you could have to pay for these repairs out of your own pocket and then seek restitution from the uninsured driver through a civil lawsuit. Having uninsured motorist coverage included in your auto insurance policy will prevent you from needing to cover these costs upfront since you will be able to file a claim with your insurance company. 

You Will Still Be Responsible For Any Auto Loans Even If Your Vehicle Is Totaled

If your vehicle is currently being financed, you should know that you are responsible for paying off your auto loan in full regardless of whether or not your vehicle is totaled in an accident. The problem with this is that the maximum amount of property damage coverage offered by many insurance policies may be less than what you currently owe on your auto loan. What this means is that even if you receive the maximum payout allowed under the insurance policy, you could still be left with a balance remaining on your auto loan. This type of situation is often referred to as a driver being underinsured. In this situation, if you have chosen to add uninsured/underinsured motorist coverage to your auto insurance policy, you will be able to file a claim with your insurance in order to cover the remaining balance on your auto loan rather than needing to cover this balance out of your own pocket.  


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