Car insurance is often a confusing and tricky topic. Most auto insurance coverages follow the car around, which means that the coverage applies if that specific car is involved in an accident or claim, regardless of the driver.
Underinsured coverage (Part 12 of the MA Standard Automobile Policy) follows you and the people that live in your house around. When a driver who causes an accident does not have enough insurance to cover the value of your claim, they are considered underinsured. You then make a claim against your own policy.
If you or a household member are involved in any type of accident- whether it be while riding in someone else’s car, walking as a pedestrian, or riding a bike- and the at fault party who was driving an automobile is underinsured, you can make a claim against your own auto insurance policy, even if your vehicle was parked in your driveway when the incident occurred. You are claiming that the person who caused the auto accident did not maintain enough insurance to cover the value of your claim.
A key fact to note: if you do not have underinsured coverage and the driver at fault does not have enough insurance to cover you claim, the only option is to go after the person’s assets. This is a path that no one wants to go down; it can get very messy and complicated very quickly.
You should make sure that your underinsured limits are greater than $20,000.00. The amount of underinsured coverage is calculated by subtracting the bodily injury policy limits of the person that caused the accident from your underinsured limits listed on your Coverage Selections Page. If the bodily injury policy limits and underinsured policy limits are the same, there is no Underinsured coverage.
Having been a personal injury attorney for the last 25 years, I have made hundreds of claims for underinsured benefits. It is an invaluable coverage that protects your family and is quite cost effective. While this may not be top of mind when considering car insurance, this is definitely something to consider.