When we ask new clients whether they have uninsured or underinsured motorist coverage, we often hear the same thing – “I have full coverage!” In reality, full coverage usually means the minimum coverage required by Hawaii law or the bank financing the car. Full coverage rarely means the new client has uninsured or underinsured motorist coverage, which are optional coverages. But these are extremely important coverages which every driver in Hawaii should have.
For a relatively small added premium, uninsured or underinsured motorist coverage provides financial protection in the event you or a family member who lives with you is injured by a driver who has no insurance at all, or a driver who does not have enough liability insurance to compensate the injured person.
Say your family is driving to the movies and is hit by a drunk driver who has no insurance and no personal assets, injuring each member of your family. Uninsured motorist coverage would kick-in to compensate your family for the uninsured driver’s misconduct.
Say a driver with the minimum required liability insurance, $20,000, runs a red light and smashes into your car, injuring your back to the point that you need surgery and can no longer work construction. Underinsured motorist coverage would kick-in because your injuries are likely worth substantially more than $20,000.
Here are some tips when purchasing uninsured and underinsured coverage. First, you want the amount of your uninsured and underinsured motorist coverage to match the amount of your liability coverage. Liability coverage kicks-in when you hurt someone else with your car. You have the right to purchase uninsured and underinsured coverage up to the same amount as your liability coverage. For example, if your liability coverage is $100,000, you can purchase up to $100,000 of uninsured and underinsured coverage. Make sure these numbers match. You don’t want to protect the public more than you protect yourself and your family.
Second, choose the “stacking” option. Stacking allows you to combine uninsured or underinsured coverages based on the number of cars you own. For example, if you have 4 cars with $100,000 of uninsured coverage which is stacked, then you actually have $400,000 of uninsured coverage available to you. If the uninsured motorist coverage is not stacked, then you only have $100,000 available to you. The same is true for underinsured motorist coverage. Stacking costs a little bit more, but it provides a huge benefit for the price.
Based on Hawaii statistics, you have a high probability of being injured by an uninsured or underinsured driver. Thus, we strongly urge you to review your insurance policy, and if you don’t already have uninsured and underinsured motorist coverage, buy them.