Uninsured & Underinsured Motorist Insurance
You may have excellent car insurance, including collision, "other than collision," and plenty of liability coverage to pay the costs of accidents you cause, and even your legal defense if you are sued. Unfortunately, many other people driving around do not have adequate coverage. Many people drive without auto insurance at all, while many others buy the bare minimum required to put the car on the road. What happens when someone else who is driving uninsured causes significant harm to you or damage to your car in an accident?
Situations like this are the reason many people choose to buy uninsured and underinsured motorists coverage, and in fact some states require it. This coverage protects you financially when the person at fault does not have the insurance coverage to pay for your injuries, medical expenses (in some states) and damage to your car.
Car Insurance and Uninsured Motorists Statistics
• There are 200 million licensed drivers in the U.S.
• Statistically, about 14% – or 1 in 7 motorists – drive with no insurance
• 20% of motorists carry the minimum liability coverage
• According to the NHTSA, every 10 seconds someone in the U.S. is involved in an accident
What Is the Definition of Uninsured Motorist Coverage?
Uninsured and underinsured motorist coverage helps to cover your costs if you are in an accident caused by someone who does not have enough insurance to pay your injury and property damage expenses. Uninsured motorist property damage and underinsured motorist bodily injury coverage can go a long way toward helping you to recover financially if you are the victim of such an accident.
There are many possible scenarios, such as an uninsured driver driving an insured car, and other variations involving motorists who are not properly covered. To find out how to best protect yourself, contact an Insurance Station agent. We can help ensure that you have the protection you need.
The Difference Between Uninsured and Underinsured Coverage
Both uninsured motorists and underinsured motorists insurance cover you when another driver is at fault in an accident and is not adequately insured to cover the expense of your injuries, property damage, and even lost wages. In some states, you are required to buy uninsured/underinsured motorists coverage, and in other states they are optional. Make sure you check with us.
While they sound similar, uninsured and underinsured motorists coverage provide two different types of insurance, as follows.
Uninsured Motorist Coverage: Uninsured motorist covers your costs in the event that the at-fault driver does not have even the minimum liability insurance, and has no coverage to pay the costs of your bodily injury and property damage.
People who drive without car insurance may feel that the fine for not being insured is likely to be less than the cost of insurance. These drivers are therefore unprepared for the possibility of being responsible for injury, fatality or property damage they may cause others. This is where the uninsured motorist coverage on your policy responds. It covers expenses you incur, up to the limits you set on your own auto insurance policy, and after you pay your deductible.
Note, however, that if you have a collision deductible waiver associated with your policy, your deductible may be waived if you are in an accident with an uninsured motorist.
Underinsured Motorist Coverage: Underinsured motorist insurance covers your costs in the event that the at-fault driver has the minimum coverage, or a very low amount of insurance. Liability limits can be as low as $15,000 in some states. When you consider the fact that you can incur costs in that ballpark for a single night’s stay in a hospital, it helps to provide perspective on the importance of underinsured motorist insurance.
If you have this coverage, and you are involved in an accident with a driver who has insufficient liability coverage, you will have access to the maximum limits of that driver’s liability policy, after which your uninsured motorist coverage will kick in to pay for your injuries and property damage up to your policy’s limits.
Who Needs Uninsured Motorist Coverage?
Because of the possibility of being involved in an accident caused by a driver who does not have adequate insurance, this coverage makes sense for any driver. Uninsured and underinsured motorists (UM) coverage can pay not only for your medical expenses and the cost of repairing or replacing your car, but it can also pay for:
• Other property damage besides your vehicle
• Medical expenses of your family members if they are harmed by an uninsured motorist
• Lost wages, and/or lost earning ability
• Non-financial costs, such as pain and suffering
Depending upon the severity of your physical and emotional injuries and property damage, most likely the financial and other costs of your accident will need to be handled through an attorney.
How Much Uninsured Motorists Coverage Do I Need?
If uninsured/underinsured motorist coverage is required in your state, your insurance company may automatically add a minimum amount of coverage to your auto policy. Be sure to go over this coverage in detail with an agent to ensure that you have adequate coverage. By most recommendations, it is a good idea to have at least $100,000 per person UM coverage, and a minimum of $300,000 per accident.
The cost of your UM coverage may be well worth it in the event that you are involved in an accident. Because the costs are prorated into your premium, you may not even notice much difference in what you pay after adding this important protection. One strategy is to increase the amount of your deductibles on your collision and comprehensive coverage. The credit you will get from changing the deductibles can help offset the additional premium.
Does Uninsured Motorists Cover Hit and Run?
If a hit and run occurs, first call the police and file a report detailing what happened. In most cases, the insurance company will investigate the accident and conclude whether that driver is uninsured or underinsured. If it is not possible to find the driver, the insurance company may consider that driver an "uninsured motorist."
If someone at the scene got the license plate number of the hit and run vehicle, the police will locate that driver, and will report to the insurance company whether the driver is insured. Your claim will be processed either way. The adjuster must make a determination at that time and decide how the claim will be handled.
Getting the Coverage You and Your Family Members Need
If you are buying a new policy, looking for an enhanced policy, or are wondering whether your coverage is adequate, you may have many questions that may or may not have been covered here. For example, if your children are riding in a car with friends, and are in an accident with an uninsured motorist, are they covered under your policy? What about your college aged son or daughter who is away at school?
Our agents at Insurance Station can help answer these questions and more.