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Underinsured Motorist Coverage (UM)

Underinsured Motorist Coverage (UM) is a type of auto insurance coverage that provides protection for drivers who are involved in an accident with a driver who has insufficient insurance coverage to pay for the damages and injuries caused by the accident. In other words, UM coverage provides a safety net for drivers who are hit by someone who carries insurance, but not enough insurance to cover the full cost of the damages.

Expenses Included in Underinsured Motorist Coverage:

Underinsured Motorist Coverage typically provides coverage for various expenses that are not covered by the insurance policy of the at-fault driver, up to the policy limits of the UM coverage. These expenses may include:

  1. Medical expenses: Medical bills resulting from injuries sustained in the accident that exceed the at-fault driver’s insurance coverage.
  2. Lost wages: Lost wages resulting from the accident, including lost income from missed work due to injuries sustained in the accident.
  3. Pain and suffering: Physical pain, mental anguish, and other non-monetary damages suffered by an individual after the accident.
  4. Property damage: Damages to an individual’s vehicle or other property caused by an underinsured driver.

How Coverage Works in Texas:

Underinsured Motorist Coverage (UM) can vary by state in terms of the minimum coverage requirements, the specific coverage options, and the eligibility criteria. In Texas, the following applies to UM coverage:

  1. Minimum coverage requirements: Texas law requires that all auto insurance policies include UM coverage unless the insured driver explicitly rejects the coverage in writing. The minimum UM coverage limits are $30,000 per person injured in an accident, up to a total of $60,000 per accident.
  2. Stacking: Policyholders have the option to “stack” their UM coverage. This means that if an individual has multiple vehicles insured under the same policy, they can add the UM coverage limits for each vehicle together to increase their overall coverage limits.
  3. Offset provision: Texas law allows UM coverage to be reduced by the amount of any other insurance policy that provides coverage for the same accident. For example, if an individual has UM coverage and also receives a settlement from the at-fault driver’s insurance policy, the UM coverage may be reduced by the amount of the settlement.
  4. Statute of limitations: There is a two-year statute of limitations for UM claims. This means that individuals have two years from the date of the accident to file a UM claim with their insurance provider.

Insurance coverage can be complex and varies depending on the individual’s circumstances and the state’s laws and regulations. You should review your policy carefully and consult with your insurance provider or legal counsel to fully understand their UM coverage and options.