Virginia only requires driver’s to carry liability insurance in the amount of $25,000 per injury and $50,000 per accident. This means that if you are hit by a negligent driver and injured or even killed in an auto accident, the most his insurance company is obligated to pay you is $25,000. If he is breaking the law and not carrying any insurance at all or has let his insurance lapse, his company doesn’t have to pay you a dime (and the guys without insurance typically don’t have many assets to collect from either).
Uninsured and underinsured motorist (UIM) coverage is part of your insurance policy that protects you, your passengers, and your family in the event that your car is hit by one of these nitwits. UIM coverage pays for any medical bills, lost wages, and pain and suffering you have endured in excess of the other driver’s liability coverage. For example, let’s say you have a $100K UIM policy. If you are hit by someone with a $25K policy and you have $75K in bills, his policy pays for the first $25K and your insurance company pays the next $50K. On the other hand, you have $125K in bills, his pays the first $25K and your policy pays the next $75K. The amount you can receive is capped by your UIM limit.
More importantly, your UIM policy puts you in the driver’s seat by letting you select your level of coverage. If you’ve ever been in a serious accident you know that medical bills can be incredibly high. A surgery and a hospital stay can easily rise to almost $100K in bills and you’d be left with zero compensation for your pain and suffering or lost wages.
For that reason, whenever we’re asked, we suggest that you carry no less than $300,000 in UIM coverage. It sounds like a lot, but it really doesn’t cost that much more than the lower policies. And if you find yourself in a position where you actually need that kind of coverage, you’ll be thankful that you have it.