What is underinsured or uninsured motorist coverage?

July 27, 2018

Much like a misplaced tool, uninsured motorist and underinsured motorist coverage don’t get noticed until something goes wrong and they are needed.

Auto Liability Insurance Basics

Oregon law requires that everyone who drives must have car insurance which covers both the driver and passengers. This mandatory insurance includes liability coverage. This means that every driver must have insurance to pay for damages to others. This insurance will pay for the other person’s medical bills, lost wages, lost future earning ability, pain and suffering, and other losses. The minimum amount of liability insurance in Oregon is $25,000. But what happens if you are injured because another driver was careless and you suffer damages greater than $25,000?

Underinsured Motorist Coverage

In some circumstances, your own car insurance policy will cover you if the person who hit you doesn’t have enough insurance. Say for example your damages are $100,000, but the driver who hit you only had a $25,000 policy. Where will the other $75,000 come from?

“Underinsured” motorist coverage in Oregon usually has the same limit as your liability insurance coverage. This means if you bought a $25,000 policy, your underinsurance coverage is probably $25,000. In Oregon, underinsurance benefits do not “stack,” which means in this case, you are stuck with the $25,000 limit of the bad driver’s policy. However, if you bought a $50,000 policy, you have an additional $25,000 of your own insurance available to cover your damages, for total coverage of $50,000 ($25,000 from the bad driver’s insurance policy, plus an additional $25,000 from your own policy). This is still less than your damages, but better than before. If you purchased a $100,000 policy, the other side’s insurance company will pay its $25,000 limits, then your policy would pay the rest of your damages, or the next $75,000, for a total of $100,000.

Uninsured Motorist Coverage

What if the bad driver who hit you has no insurance at all? In Oregon, your auto insurance policy also includes what is called “uninsured” motorist coverage. This means if the bad driver has no insurance at all, your insurance policy will cover your damages. Here too, your recovery will be limited by the limits of your policy—if you purchased a $25,000 policy, you can only recover up to $25,000. The same is true with larger policies as well—your claim against your own insurance policy for someone else’s negligence is limited by your policy limits.


Oregon law requires each of these types of insurance be included in your own auto insurance coverage. If you have questions regarding insurance coverage for a significant injury from a car accident, contact us. We’ll give you a free initial consultation and explain your rights to you.

Also serving Ashland, Jacksonville, Applegate, White City, Central Point, Eagle Point, Klamath Falls, and people all over the State of Oregon