underinsured motorist property damage (UIMPD) is a type of insurance coverage that provides protection for property damage resulting from an accident caused by an underinsured driver. When an underinsured driver causes an accident, the damages that exceed their liability coverage can be covered by UIMPD coverage.
UIMPD coverage is not mandatory in all states, but it can be a valuable addition to your auto insurance policy. In states where UIMPD is offered, the coverage typically applies when the at-fault driver’s liability limits are insufficient to cover the full cost of the property damage caused by the accident.
For example, let's say you are involved in an accident where the other driver is at fault and only has liability insurance with a limit of $25,000. However, the total cost of damages to your vehicle and other property is $35,000. If you have UIMPD coverage with a limit of $10,000, your insurance company will pay the remaining $10,000 to cover the difference between the at-fault driver's liability limit and the total cost of the damages.
It's important to note that UIMPD coverage only applies to property damage and not bodily injury. If you are injured in an accident caused by an underinsured driver, your medical expenses and other damages would typically be covered by your own uninsured/underinsured motorist bodily injury (UMBI) coverage, if you have it.
When considering whether to purchase UIMPD coverage, it's important to consider the potential cost of property damage in an accident caused by an underinsured driver. In some cases, the cost of this coverage may be relatively low compared to the potential cost of property damage.
UIMPD coverage can also provide peace of mind knowing that you are protected in the event of an accident caused by an underinsured driver. Without this coverage, you may be left with a significant financial burden to repair or replace your damaged property.
In conclusion, UIMPD coverage can be a valuable addition to your auto insurance policy, especially in states where it is not mandatory. It provides protection for property damage caused by an underinsured driver and can help you avoid a significant financial burden if you are involved in an accident. Be sure to speak with your insurance agent to learn more about this coverage and whether it is right for you.