Anyone who drives in Connecticut is required to obtain a certain amount of insurance. The purpose of this requirement is two-fold. First, if a driver causes an accident resulting in serious injuries, the driver may not be able to pay for the victim’s injuries. Insurance provides a source of compensation for the accident victim, even if the at-fault driver is insolvent.
The second reason for the auto-insurance requirement is for a motorist’s own protection in the event of an accident caused by an underinsured driver or a driver who has no insurance at all. In these cases, a motorist’s underinsured/uninsured protection will cover their injuries, up to the policy limit. However, even with uninsured motorist protection, there are some situations in which a motorist will not fully be able to recover compensation, due to the limits of their own policy. Conversion insurance can help motorists tap into the full value of their policy.
Conversion insurance, like underinsured motorist protection, provides coverage in the event of an accident involving an underinsured motorist. The benefit of conversion insurance, however, is that it is not reduced by payments received from other sources. For example, assume a motorist with a $200,000 insurance policy sustains $500,000 in injuries caused by another driver with an insurance policy maximum of $300,000. With traditional underinsured motorist protection, the accident victim will only receive $300,000 from the underinsured driver’s insurance policy. This is because the accident victim’s insurance policy only guarantees $200,000, regardless of the source. In this case, the accident victim received what he was promised– $200,000 – even though it was not from his own insurance policy. Thus, the accident victim’s claim under his own insurance policy would be for $0. This is because with traditional underinsured motorist insurance, the total recovery amount is reduced by funds received from any other source, in this case the other motorist’s insurance policy.