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How Does Underinsured Motorist Conversion Coverage Work?

How Does Underinsured Motorist Conversion Coverage Work?

Some form of uninsured/underinsured motorist (UIM) coverage is offered in all states as a means of providing drivers with the opportunity to protect themselves in the event of a crash with an at-fault driver who does not carry sufficient liability coverage to pay for their bodily losses. In the state of Connecticut, drivers are offered a unique insurance option known as “underinsured motorist conversion coverage.” Compared to UIM coverage options in most other states, this type of coverage is friendlier to the policyholder and generally provides better financial protection.

Standard UIM Coverage vs. UIM Conversion Coverage

At first glance, regular UIM coverage seems pretty simple. In simple terms, UIM coverage is additional coverage added to your own policy which protects you in the event of a collision with another driver whose insurance policy is not sufficient enough to cover your losses. Sounds like you have nothing to worry about, right? Not so fast.

Let’s say that you were involved in a car accident and end up incurring $200,000 worth of medical bills, lost wages, and pain and suffering damages. The other driver, who was at fault for the crash, only has $50,000 in liability coverage. You have $150,000 in UIM coverage under your own policy. Unfortunately, the amount you can collect after this collision is not $200,000 (the other driver’s $50,000 plus your $150,000 UIM coverage). Under the traditional system, you will only be able to recover up to the limits of your policy, which in this case is $150,000. While the other driver’s insurance contributes $50,000, your insurance company would receive a credit for this amount and pay the additional $100,000 to bring you up to your policy’s cap. Unfortunately, this still leaves you with $50,000 worth of uncovered losses.

UIM conversion coverage protects you against this financial gap. Under this system, whatever coverage you purchase is added to the other driver’s coverage. Let’s look back at the last example. If your policy contained UIM conversion coverage instead of traditional UIM, your $150,000 in additional coverage would be added to the other driver’s $50,000, allowing you to recover the full $200,000 and be reimbursed for the total amount of your losses.

This not only illustrates the importance of purchasing UIM conversion coverage, but also the importance for motorists to thoroughly read and understand the terms of their insurance policies. Should you be injured in a collision, it is important you consult with a knowledgeable attorney to ensure your rights as a policyholder are protected. At the Law Offices of Brian J. Mongelluzzo, LLC, our Connecticut auto accident lawyers have represented thousands of injured victims and can provide the aggressive representation you need to maximize your financial recovery.

Call (203) 663-3695 today to take the first step towards filing a claim.

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