Uninsured or Underinsured motorist coverage covers you and your insured family members and your property if the driver at fault is not insured or if his/her policy is insufficient to cover the exact expense.
It also covers your expenses if the faulty driver's insurance company refutes the claim or if you are a victim of a Hit and Run accident.
Uninsured Motorist Bodily Injury (UM)
This automobile insurance policy covers the insurer from any bodily injury, damage or death caused by an uninsured driver or in a hit and run accident. If you are involve in an accident in which the person at fault is not insured, your medical expenses will be covered by your policy. You are covered even if you are not driving. Say if you are hit by a car while crossing the street and the driver either flees or is uninsured your policy will cover all your medical expenses as well as your lost wages. This is quite beneficial as even your health insurance or medical expenses coverage won't pay your lost wages. Uninsured Motorist Bodily Injury protection also covers you and your family travelling in other cars.
UM covers policyholders, passengers and other drivers covered by the policy. If the driver who is at fault in case of an accident is uninsured, this policy pays medical expenses up to the limit you have purchased. Coverage limit is the maximum amount that will be paid by the insurance company, per person, per incident.
Uninsured Motorist Property Damage (UMPD)
This policy is valid when the insured person suffers damage at the hands of an uninsured driver. Though it might appear strange to you Uninsured Motorist Property Damage is a good option for those who are not covered by collision coverage.
It can prove useful to protect your car from uninsured drivers without raising you premium. One more added benefit with UMPD is its lower deductible is usually cheaper than collision coverage of the same deductible value. However as a Fair Use policy UMPD is usually not applicable in a hit and run accident. This is to avoid fake claims.
Underinsured Motorist Bodily Injury (UNDUM)
This policy covers injury, bodily damage or death caused by the negligence a motorist whose insurance is inadequate to cover the damages. This policy pays the difference in amount of the injury suffered and the liability coverage of the motorist at fault. To be more elaborate, the amount this policy covers is determined by calculating the difference between the loss and damage you have actually suffered and the amount the other driver's insurer has to pay.
If the amount is less than the limits of your policy, you will receive the full amount of the difference. If not, you will receive the amount of the difference up to the limit on your policy.
Suppose you suffered damage worth $1000 dollars and the other driver's insurance policy can only pay $300. Your policy will cover ($1000 - $300=) $700. If the limits of your policy is $1000 you will be paid the entire some. However if the limit is only $500, the policy will cover only $500. You will have to bear the rest $200. I hope i am making myself clear.
This might be more useful for people who are not covered by health insurance because if the limits agreed are insufficient, the additional amount will be borne by you.
Underinsured Motorist Property Damage (UNDPD)
This policy is much like the UNDUM differing only in the subject of insurance. Unlike UNDUM this policy is responsible to cover the damage and losses suffered by your property by the negligence of a motorist whose insurance is insufficient to cover the damages caused.
If you are not covered by a Collision coverage policy UNDPD policy pays you certain amount for repairs to the insured car. If you are covered by Collision coverage the UNDPD policy will only pay you the amount up to your Collision deductible.
UNDPD is not a replacement alternative for Collision coverage because it is not sufficient in many cases to cover all expenses on its own.