While most of us have car insurance, not all of us may know exactly what our policy offers in the event of a collision. If you have been in a car accident, you know that the cost of repairs can be very high; When there are injuries, especially serious ones, involved in those accidents, the bills can be astronomical. We assume that because we have insurance, our bills will be paid in the event of an injury accident. However, that is often not the case.

tragic accident

In May 2006, the Nixon family was returning home from a family trip to Florida. Bob Nixon was driving and his 8-year-old son Travis was sleeping in the front seat next to him. Travis’s 5-year-old sister, Danielle, was in a child seat right behind Bob, and his wife, Nancy, was sitting in the back seat behind Travis.

Everyone but Bob was asleep when a drunk driver collided head-on at 60 mph into their Chevrolet Tahoe SUV. The force of the impact caused the Tahoe’s body to disengage from the bolts that held it to the truck’s frame. The impact also caused the floorboards to lift and the dashboard to fall in front of Travis, who was lying on his side in the front seat with his seat belt fastened. If Travis had been sitting upright, his legs would have been cut off. Karen Nixon was pinned against the back of the front seat; she had her pelvis, thigh, leg, arms, and ribs broken, and she suffered a head injury. Travis suffered head injuries and compound fractures to both legs.

Without signal

Just when the Nixons thought their nightmare couldn’t get any worse, it did. They soon discovered that the driver of the vehicle that hit them had insurance that only covered $25,000 per incident. The Nixons had uninsured motorist coverage, but they didn’t have underinsured motorist coverage. Most of their medical bills would not be covered, leaving them with several million dollars in expenses. The man who hit them had the minimum coverage required in the state of Tennessee.

Underinsured Motorist Coverage

Underinsured motorist coverage is defined as an auto policy option that covers property damage and bodily injury caused by another motorist whose coverage is insufficient to cover the damages one has suffered. This coverage compensates the injured party for the difference between the injury suffered and the liability covered by the at-fault driver’s insurance.

In the case of an underinsured driver, you first receive compensation from the other driver’s insurance company within your policy limits, and then, if there is still damage, file a claim with your own insurance company for the balance.

Uninsured motorist coverage

Uninsured motorist coverage [http://www.trantololaw.com/auto_insurance.html] pays for damages caused by an uninsured driver. The driver may have never purchased auto insurance or the insurance coverage may have simply expired. Either way, having uninsured motorist coverage protects you when you’re involved in an accident with a driver who doesn’t have auto insurance.

Uninsured or underinsured coverage can put you at odds with your own insurance company, especially if you disagree about who was at fault for the accident or the extent of your injuries. The company may reduce your compensation if it decides that you were at fault, even in a minor way.

Because the Nixons, like many families, did not know about underinsured motorist insurance, they will be saddled with financial debt for the rest of their lives. Don’t let this happen to you.