Auto insurance exists to cover you financially if you get into an accident, but what if the driver who caused the accident doesn’t have coverage or not enough coverage? That’s where uninsured motorist (UM) and underinsured motorist (UIM) coverage come into play. These coverages assist in protecting you from financial loss due to drivers who don’t have enough coverage. In this article, we will look at the value of UM and UIM coverage, how it operates, and why you need to include them in your policy.
What is Uninsured Motorist (UM) Coverage?
Uninsured motorist coverage offers monetary protection in the event of an accident with an uninsured driver. It pays for:
Medical bills for you and your passengers.
Lost income because of injuries.
Pain and suffering due to the accident.
Funeral costs in the case of a deadly crash.
Why Is UM Coverage Important?
In the United States, an estimated 1 out of every 8 drivers is not insured, according to the Insurance Research Council. This implies that if you are involved in an accident with an uninsured driver, you may end up paying for it yourself unless you carry UM coverage.
What Is Underinsured Motorist (UIM) Coverage?
Underinsured motorist coverage insures you when the fault driver is insured but their limits are not adequate to pay all the damages. This coverage will pay for the remaining expenses beyond the fault driver’s liability coverage.
For instance, if the negligent driver has $25,000 liability coverage, but your medical expenses are $50,000, your UIM coverage would fill in the gap to pay the additional $25,000 (subject to your policy limits).
How Do UM and UIM Coverage Work?
When you make a claim for UM or UIM coverage, your insurer will act as though they were the at-fault driver’s insurer. Your insurance provider will determine the damages and pay you accordingly, based on the policy limits.
UM/UIM Coverage Types:
Bodily Injury (UMBI/UIMBI): Pays for medical bills, lost time, and pain and suffering.
Property Damage (UMPD/UIMPD): Covers repairs to your vehicle or property damage caused by an uninsured or underinsured driver (not available in all states).
Is Uninsured and Underinsured Motorist Coverage Required?
While UM and UIM coverage are not required in every state, some states mandate it as part of auto insurance policies. Even in states where it’s optional, adding this coverage is highly recommended to protect yourself financially.
States That Require UM/UIM Coverage
Certain states, including Connecticut, Illinois, Maryland, Minnesota, Missouri, New York, North Carolina, and Wisconsin, mandate drivers to have UM and/or UIM coverage. Look up your state’s requirement to see if you must have this coverage.
Advantages of Having UM and UIM Coverage
- Financial Protection from Uninsured Drivers
In case you get hit by an uninsured driver, UM coverage will guarantee that you won’t have to pay medical bills and damages out-of-pocket.
- Coverage for Hit-and-Run Accidents
In most states, UM coverage applies to hit-and-run accidents as well, ensuring you pay for medical bills in case the negligent driver runs away.
- Peace of Mind
You need not worry if another driver carries enough insurance since with UM and UIM coverage, your policy will safeguard you in any event.
- Affordable Coverage for Added Security
UM and UIM coverage is usually a cost-effective addition to your policy and offers valuable protection in worst-case situations.
How Much UM/UIM Coverage Do You Need?
When you select UM/UIM coverage limits, keep in mind:
The amount of medical bills in a severe wreck.
The likelihood of lost income if you’re hurt and can’t work.
Whether you can afford to pay out-of-pocket costs if an at-fault driver who has no insurance or insufficient insurance hits you.
A general guideline is to choose UM/UIM limits equal to your liability limits so that you’re well-protected.
Conclusion
Uninsured and underinsured motorist coverage are important parts of a complete auto insurance policy. With so many uninsured and underinsured drivers on the highways, carrying these coverages ensures you won’t suffer financially from someone else not having insurance. Even if it’s not required in your state, including UM and UIM coverage is an intelligent move in protecting yourself, your passengers, and your economic future.