One of the most frequent conversations I have with clients is the "How can I reduce my premium?" conversation. BTW, I am still waiting for the "How can I increase my premium?" conversation, but I'm guessing that will be a long wait!

For most of our clients, their biggest insurance expense is auto insurance, so that is where the conversation usually begins. There are many ways we can reduce premiums, and one of the coverages that is always under scrutiny is the Underinsured Motorist Coverage.

In a nutshell, this coverage pays for injuries or damage you receive from a driver that doesn't have sufficient insurance to pay for the damage caused in the accident. These damages can be to your vehicles or injuries to you or your family members. The injuries can include pain and suffering, medical expenses, long term care, lost income or compensation for a permanent disability.

As an aside - do you know you don't have to be in your car to be covered by Underinsured Motorist? If you are in an accident as a pedestrian or bicyclist, your auto policy can provide Underinsured Motorist coverage. Pretty cool, right?

The Underinsured Motorist premiums are increasing for two primary reasons. First, the cost to put people back together again, primarily medical costs, are increasing. Second, as unemployment stays high more drivers are unable to continue their insurance. (In insurance language: greater severity and greater loss frequency - a sure recipe for higher premiums.)

A recent Insurance Information Institute survey reported that on average, nationally, 1 in 6 drivers are uninsured. In some states, especially ones with sustained high unemployment rates, this figure can reach 1 in 3! Next time you are out driving count the cars on the road; odds are out of every 6 cars you see 1 is uninsured!

Damage and injuries caused by an uninsured driver are a very real possibility. Though not always stressed, underinsured motorist coverage is a key component of your auto policy and in today's economy perhaps more important than ever.

Questions or comments? Just let us know!