Why must UIM Conversion coverage be offered?

Offering UIM (Underinsured Motorist) Conversion coverage is essential because it allows policyholders to convert their coverage from a difference in limits approach to an add-on approach. When UIM is implemented as a difference in limits, the underinsured motorist coverage only pays the difference between the coverage limits of the policyholder and that of the at-fault driver. However, when UIM Conversion is offered, it allows for a broader range of coverage, ensuring that the policyholder can add the UIM limits directly to their own limits. This enhancement is crucial because it provides more comprehensive financial protection in the event of an accident with an underinsured driver.

Thus, understanding the significance of UIM Conversion coverage is critical for both policyholders and adjusters, as it fundamentally changes the way underinsured motorist coverage functions, providing greater support to insured individuals who might otherwise find themselves underprotected in the event of an accident.