State law mandates car insurance in many states; however, some drivers still choose not to purchase it and even if they do have coverage, their limits may not cover all the expenses resulting from an accident.
Uninsured and underinsured motorist coverage comes to the rescue here, covering your injury expenses as well as damages to your vehicle.
1. Uninsured Motorist Coverage
Uninsured motorist coverage (UMBI), also referred to as uninsured driver protection (UDIP), provides financial relief in case you get involved in an accident with someone without enough car insurance or who doesn’t carry enough coverage to cover damages caused. It should be noted that uninsured motorist coverage differs from collision deductibles and medical payments/personal injury protection which are part of most auto policies.
Uninsured motorist coverage (UM coverage) is readily available in most states and may even be mandatory as part of your minimum liability coverage requirements. Even when not required by state laws, uninsured motorist coverage (UM coverage) remains an important safety net to have in place; 13% of U.S. drivers don’t possess car insurance and driving without it increases your likelihood of accidents that lead to serious injuries.
When uninsured motorist (UM) coverage applies, it will cover medical bills, pain and suffering expenses and any vehicle damages if an uninsured driver strikes you down. Your policy may also cover damage to your own car; when filing a claim with your own insurer it’s usually helpful to have copies of all related paperwork such as accident reports.
UM/UIM coverage will take over in this instance if the at-fault driver only carries minimum liability limits, and you’re involved in an accident with them. Their insurer should pay up to their policy limits; if that coverage falls short, your own UM/UIM policy must cover any remaining amounts; thus it’s wise to choose an amount at least equal to your liability policy’s maximum limit when selecting your coverage limits for both policies.
Some states also provide uninsured motorist property damage coverage (UMPD). This form of coverage pays for damage to your vehicle if it’s hit by an uninsured or underinsured driver; typically included as part of minimum limits in liability policies but sometimes available separately if allowed by your state. UMPD often comes with similar deductible amounts as collision deductibles so may sometimes work out cheaper; contact your insurance company or check online resources in your state to find out more details regarding its requirements for coverage.
2. Underinsured Motorist Coverage
Imagine getting involved in an accident with a driver who doesn’t carry enough insurance, or who only meets state minimum liability limits. That would leave you and your passengers responsible for paying any medical bills from any injuries sustained as out-of-pocket expenses; but Uninsured Motorist (UM) coverage can help cover these costs (your insurer may add it onto your policy as either an addendum or endorsement). Most states allow drivers to select their UM coverage limits in tandem with those for liability policies–some drivers even opting to match it accordingly.
Some car owners also purchase underinsured motorist coverage to protect themselves in the event that the at-fault driver only has limited liability insurance and does not cover all the damages sustained from an accident. This type of protection pays your policy’s property damage liability limits when another party doesn’t have enough to pay for your damage; additional protection can be added with collision coverage (which protects against collisions with uninsured or underinsured drivers) to give even greater peace of mind.
Many drivers don’t realize that many on the road possess inadequate liability coverage. According to one study, 13% of drivers nationwide don’t have any auto insurance at all while many others only carry minimum state minimum requirements – meaning if involved in an accident with these drivers or only possessing minimal liability protection you could end up facing substantial bills as a result of their insufficient policies.
With Uninsured Motorist and Underinsured Motorist coverage, you can mitigate that risk. Reach out to your agent and learn about how much UIM/UM coverage to purchase or add onto your policy; it is an inexpensive way of protecting yourself and your family against another driver’s bad decisions that end up hurting both parties involved in an accident. You could also add no-fault personal injury protection coverage which pays quickly regardless of who was at fault in an accident for medical costs and economic losses up to $50,000 per person involved in a crash.
3. Medical Payments
Medical Payments Coverage, commonly referred to as MedPay, covers medical costs and vehicle repairs resulting from accidents involving uninsured drivers or underinsured motorists who lack coverage. MedPay may also help cover lost wages should the other driver or your UIM coverage not cover all your expenses. MedPay is often added onto car policies; just remember it’s meant as supplemental coverage once UIM or another insurer have compensated you.
Experts generally advise UM/UIM coverage limits that meet or surpass the minimum liability coverage levels required in your state, so as not to leave yourself exposed in case an accident caused by another negligent driver exceeds their insurance limits and you become financially responsible for covering damages that go beyond what their policy allows for.
Let’s say you get hit by a driver with minimal liability limits of 25/50/20; they would only cover up to $25,000 for bodily injury and $50,000 in property damage claims, which might not cover much. But what if their accident left you hospitalized for several days or injured other passengers as well? In such a situation, this figure might easily exceed the $75,000 cap that their insurance offers.
Though not required in every state, UM/UIM coverage can provide added protection at an affordable price. If you need help understanding UM/UIM policies or determining how much coverage to purchase, contact one of Goosehead’s agents who will partner with you to assess your individual situation and explain each level of coverage’s potential advantages and disadvantages.
Do I Require Uninsured Motorist Insurance?
4. Property Damage
Uninsured Motorist Property Damage Coverage (UMPD) covers repair costs for your car when an uninsured driver hits it, saving money in repair bills from an uninsured accident. Though optional, rates tend to be reasonable and pairing UMPD with bodily Injury coverage can provide added protection if another driver lacks sufficient coverage.
Accidents happen every day and often come with significant financial repercussions. From vandalized fences in your neighborhood, destroyed equipment at work, or an automobile totaled by accident – accidents of all sorts can leave their victims with expensive repair or replacement bills to cover.
Uninsured/underinsured drivers can exacerbate these expenses significantly. Underinsured Motorist (UM) coverage helps safeguard you from having to cover these expenses out-of-pocket, provided your policy contains sufficient limits.
Bodily injury coverage helps in cases when you or your passengers are injured due to another driver, while property damage claims must be filed as third party claims and not against their car insurance policies.
Your car insurer will review the details of a property damage incident and establish what amount is payable through your policy, taking into account any liability protection options you choose when purchasing auto coverage.
As well as uninsured and underinsured motorist coverage, collision and comprehensive car insurance policies also offer additional options to cover your own damage in an accident caused by yourself, even when another party doesn’t carry enough coverage to pay out in full. It is therefore vital to always select adequate limits when purchasing car insurance policies. To learn more about uninsured and underinsured motorist policies it would be a good idea to talk with an independent agent who will assess your unique circumstances to help make informed choices for yourself and your family’s benefit.