You and the uninsured motorist

Millions of people are driving around each day risking their financial future without knowing it. Most are conscientious citizens who carry auto insurance, but they are not prepared for what can occur if they happen to be involved in an injury collision with an uninsured or underinsured driver.

Based on most U.S. state laws, these drivers expect the other driver's insurance to pay for their medical bills automatically. But that is not necessarily what is going to happen. If you're not careful, your life savings may end up paying for your medical expenses even if the accident wasn't your fault.

How can this happen? All too simply. If the driver who hits you doesn't have enough insurance or enough personal assets, you will end up having to pay your own medical bills. That means bill collectors will look first at your insurance, then your assets and savings.

To avoid having to dip into your savings, you should make sure you have the right insurance coverage for this situation, which is called underinsured coverage. While liability, comprehensive and collision insurance are still important when assessing your overall car insurance coverage, protecting against the other driver's lack of insurance could be what saves you the most.

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