Underinsured Motorist Endorsement

What Does Underinsured Motorist Endorsement Mean?

An underinsured motorist endorsement is an added provision to an automobile insurance policy that offers coverage to the policyholder and their passengers in the event of an accident caused by a driver with insufficient insurance. Typically, there is a gap between the other driver’s liability coverage and the amount payable under the underinsured motorist coverage. This endorsement bridges that gap, covering the difference up to the policy’s maximum coverage limit.

This endorsement is also referred to as supplementary underinsured motorist (SUM) coverage or an underinsured motorist clause.

Insuranceopedia Explains Underinsured Motorist Endorsement

Purchasing underinsured motorist coverage is optional but provides additional protection for policyholders involved in an accident with an at-fault driver who lacks sufficient insurance. For instance, if the at-fault driver has only $100,000 in coverage and the insurance claim amounts to $150,000, this endorsement would cover the $50,000 difference, minus any applicable deductibles.

The risk of encountering an underinsured driver is higher than many people assume. According to recent uninsured motorist statistics, a large percentage of drivers on U.S. roads carry only the state minimum liability limits, which are often too low to cover serious injuries. That is exactly the situation this endorsement is designed for. Choosing how much liability insurance you need on your own policy can also help you decide what UIM limits to carry, since many insurers require your UIM limits to match or fall below your liability limits.