Auto liability insurance and underinsured policy

Question

I live in MA. Recently I was in an accident where the over driver was at-fault 100% and is not contesting this. I was moderately injured and had several dr appoints and tests for broken ribs and being banged up. I've come to find out that the at-fault driver only has the minimum liability of $20,000 and nothing more. I thought I had prepared for this by buying underinsured motorist coverage in the amount of $20,000 but I am being told that my underinsured motorist coverage would pay only if I had a higher amount than his liability. As an example if I had $50,000 of underinsured motorist and he had $20,000 liability then I could obtain $30,000 of coverage from my underinsured policy. I am trying to find out (1) if this is indeed the case that I only receive underinsured motorist coverage when I have more than his liability police and (2) if it is then how it is possible that someone can buy $20,000 of underinsured motorist coverage in the first place as it would never cover anything and would only be a waste of money.

I thank you in advance for any assistance.

Answer 1

I think you are misunderstanding what they are telling you.

His insurance is billed first since he is at fault. Your insurance takes over after that. If you have a deductible on this part of the coverage, you pay that out of pocket; the insurance then gets applied to the rest.

So, yes, your own insurance would cover only $30k of a $50k claim, but that's because the other $20k is paid by his company.

Modulo the usual wrangling over what is and isn't covered, any deductible, and similar quibbling.

In other words, you should be getting exactly the coverage you paid for. You don't get to add the two policies together except sequentially.

As far as the mechanics of this goes, I would expect your insurance company to help you get the money from the other driver's insurance. Ask them for details.