For starters, uninsured coverage would benefit you if you were involved in an accident where the other driver is responsible but doesn’t have insurance. If you sustain injuries along with damage or loss to your vehicle, you can still receive compensation. Therefore, if you elect the uninsured motorist policy, you would have additional protection under such circumstances. However, if you choose to waive that coverage because it’s cheaper, the insurance companies might encourage you to opt for the least expensive policy. That would leave you with no cause of action. Whereas if you have a reasonable amount of uninsured motorist coverage, in the event that the person responsible for the accident doesn’t have any insurance coverage, you still have an avenue of recovery.
Likewise, underinsured motorist coverage is very similar, but again, what if a driver causes an accident and has only a minimum amount of coverage? In Pennsylvania, the minimum amount of coverage required is $15,000, but consider the possibility of the other driver suffering injuries that cost $50,000 or $100,000 or $1 million. Under those circumstances, underinsured motorist coverage would be applied to fill the gap between the driver who has inadequate coverage and the other individual who sustains a significant amount of injuries and/or vehicle damage.