Preventing Some Dangerous Mistakes When Buying Car Insurance

From Insurance for Dummies by Jack Hungelmann

One of the most common mistakes people make when buying insurance is in the areas of Uninsured and Underinsured Motorists coverage. They either buy one coverage without the other, buy lower limits than their auto liability limits, or buy inconsistent limits (a higher limit for one coverage than the other). The following list gives each of these pitfalls and what you’re, in effect, saying if you make the mistake.

• Buying Uninsured and not Underinsured coverage. “I’m willing to bet that the other driver will have zero insurance. If I am injured by a driver with less insurance than he needs to pay for my injuries and no sueable assets, I’m willing to not be compensated fully.”
• Buying less Uninsured and Underinsured coverage than you buy in liability coverage for injuries you cause to others. “I sincerely believe my injuries and suffering are worth less than those of someone I may hit.”
• Buying inconsistent Uninsured and Underinsured limits (for example, $300,000 Uninsured and $50,000 Underinsured). “I’m willing to accept less compensation when injured by an underinsured driver than when I’m injured by an uninsured driver.”

Clearly none of these assumptions make any logical sense. It’s worth repeating: Buy Uninsured and Underinsured Motorist coverage limits in equal amounts, and equal to the liability limits you buy.