You are a responsible driver. You buy insurance. But what happens when an uninsured motorist rear ends you at that stoplight? That’s where uninsured motorist coverage comes in.
Uninsured motorist coverage protects you when you get into an accident where an uninsured motorist didn’t have liability insurance, of if that other driver’s coverage was insufficient to pay for all of your losses, making them an underinsured motorist.
What is uninsured motorist coverage?
So, you are asking yourself, what is uninsured motorist insurance. Well, you have come to the right place.
Uninsured motorist insurance is that part of your coverage that keeps you protected from all those people out there who disregard common sense and the law and drive without insurance. In some states, uninsured motorist coverage is mandated by law. In other states, you are given the choice if you want to carry uninsured motorist insurance.
But, before you make a rash decision about uninsured motorist insurance, it is useful to understand some numbers.
Nationally about one in eight drivers don’t have the insurance required by law. In some states, such as Florida and Oklahoma, that number is closer to one in four.
So, let’s say you get into an accident that wasn’t your fault. Typically, your first move is to file a claim with the other driver’s insurance. Their insurer would pay for your vehicle to be repaired and would cover any medical bills you might incur. They could even cover your lost wages and possibly reimburse you for your pain and suffering.
But what if they are an uninsured motorist? This is where uninsured/underinsured motorist coverage comes in. Also known as UIM insurance, these policies keep you from having to come out of pocket yourself for those losses.
What’s the difference between underinsured motorist bodily injury and property coverage?
Uninsured motorist coverage comes in two flavors – property damage and bodily injury. So, let’s start with what is uninsured motorist property damage coverage.
Uninsured motorist property damage policies take care of any damage to your vehicle caused by an uninsured motorist. The coverage differs by state and in some cases comes with a deductible.
OK, so now, let’s discuss uninsured motorist bodily injury. The uninsured bodily injury coverage steps in and pays for injuries and medical bills you may incur.
In most states, uninsured motorist bodily injury and uninsured motorist property damage coverage are separate policies. So don’t assume that if you have one you are covered for both types. Make sure to clarify what exactly you are hoping to be covered for when you talk to your agent.
Now, both of those coverage options assume the other driver had no insurance. But what if they had insurance but it wasn’t sufficient to cover your losses? That’s where underinsured motorist coverage comes in. Much like uninsured motorist coverage, underinsured motorist coverage takes care of things that weren’t your fault.
In the case of underinsured motorist coverage, it reimburses you for losses that are over and above their coverage limits. Think of it like a safety blanket.
What does uninsured motorist cover?
Uninsured motorist coverage acts just like if that other driver was properly insured. Any damage to your vehicle that would have been covered by their liability policy would now be covered by your uninsured motorist coverage under the property damage provision (if you opted for it.)
And any injuries you or your passengers suffer that would have been covered by the uninsured motorist if they had liability insurance would now be covered by you uninsured motorist insurance under the personal injury provision.
In many cases, your uninsured motorist coverage can also cover lost wages, as well as pain and suffering you incurred do to the negligence of an uninsured motorist.
Do I need uninsured motorist coverage?
It really makes sense to get uninsured motorist coverage. Generally, uninsured motorist coverage is inexpensive – it typically costs about 5% of your total policy as a rule – but is more expensive in states with more uninsured drivers
But that’s not to say that uninsured motorist coverage is the only option.
Let’s say the worst-case scenario happens and you don’t have uninsured motorist coverage. Does that mean you are left out in the cold with no coverage at all if you are hit by an uninsured motorist?
Well, that depends.
If you have private health insurance, either through your employer or through a state health care exchange or through Medicare or Medicade, that will likely pick up your medical expenses after an uninsured accident.
And if you have collision coverage, that will cover the damage to your vehicle — after your deductible of course.
And if you want to recover pain and suffering, you always have the option of filing a lawsuit against the other driver personally.
But for most drivers, given the relative low cost of uninsured motorist coverage, and given the relatively high number of uninsured motorists on the road, uninsured motorist insurance is a low-cost option for additional peace of mind.