Underinsured Motorist Endorsement

AAA

DEFINITION of 'Underinsured Motorist Endorsement'

An added provision or attachment to an automobile insurance policy that provides insurance coverage to the policyholder and his or her passengers in the event of an accident caused by a driver who does not have sufficient coverage. The underinsured motorist endorsement covers bodily injury to the policyholder, insured members of the holder's household and passengers, and may also cover property damage. The endorsement typically pays the difference between what the other driver's insurance covers and what the underinsured motorist coverage will pay, subject to the maximum limit of the coverage.

INVESTOPEDIA EXPLAINS 'Underinsured Motorist Endorsement'

For example, consider a situation where a driver A only has $100,000 of insurance coverage. This driver A gets in an accident with a underinsured motorist policyholder (driver B) where driver A is at fault. The insurance claim amount is $175,000, so driver A's insurance only covers $100,000 of that. The underinsured motorist endorsement would pay the policyholder (driver B) the difference of $75,000 less deductibles.

RELATED TERMS
  1. Underinsured Motorist Coverage

    An auto insurance policy provision that extends coverage to include ...
  2. Collision Insurance

    A type of auto insurance coverage. Collision Insurance will reimburse ...
  3. Auto Insurance

    A policy purchased by vehicle owners to mitigate costs associated ...
  4. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  5. Endorsement

    1. A legal term that refers to the signing of a document which ...
  6. Commercial Package Policy (CPP)

    An insurance policy that combines coverage for multiple perils, ...
Related Articles
  1. Options & Futures

    Beginner's Guide To Auto Insurance

    Find the perfect policy that suits both your coverage and budgetary needs.
  2. Options & Futures

    Top Tips For Cheaper, Better Car Insurance

    Accident, theft, vandalism - make sure your coverage will protect you when you need it most.
  3. Insurance

    Do You Need Casualty Insurance?

    Find out how different types of coverages can protect you and which policy is right for you.
  4. Insurance

    The True Cost Of Owning A Car

    Driving is often the most convenient way to get around, but it'll cost you.
  5. Savings

    Top 10 Fastest Growing Industries in the United States

    Six of the ten fastest growing industries are directly related to new residential construction.
  6. Budgeting

    How Your Government's Budgetary Decisions Impact the Public Sector

    Issues facing the public sector are not unlike some issues facing America’s oldest and largest companies, but with larger and broader impacts.
  7. Economics

    What's Demand Elasticity?

    Demand elasticity is the measure of how demand changes as other factors change. Demand elasticity is often referred to as price elasticity of demand because price is most often the factor used ...
  8. Budgeting

    4 Secrets You Should Know When Buying Groceries

    With a little foresight, every consumer can find ways to eat healthier without spending much money.
  9. Savings

    This Mysterious Job Saves You Money On Groceries

    Mystery shoppers visit various establishments. Discover how their efforts will save you money in the long run.
  10. Budgeting

    Ready To Save Money While Eating Healthy?

    These six cheap and nutritious foods are a perfect way to deal with rising grocery prices while staying healthy.

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center