Introduction
How This Vital Coverage Protects You Against At-Fault Uninsured Drivers
When you’re on the road, you rely on your auto insurance to protect you after an accident. But what happens if the at-fault driver doesn’t have insurance—or enough insurance—to cover the damages? That’s where Uninsured/Underinsured Motorist (UM/UIM) coverage comes in. This often-overlooked type of insurance is crucial for protecting you financially in situations where the other driver can’t pay for the damages they caused.
In this blog, we’ll break down what uninsured/underinsured motorist coverage is, how it works, and why it’s essential for safeguarding your finances and peace of mind.
What Is Uninsured/Underinsured Motorist Coverage?
Uninsured/Underinsured Motorist Coverage (UM/UIM) is a type of auto insurance designed to protect you if you’re involved in an accident caused by a driver who either:
- Does not have insurance (uninsured motorist).
- Does not have enough insurance to cover your damages (underinsured motorist).
This coverage helps pay for medical expenses, lost wages, and other costs that may arise from the accident if the at-fault driver can’t cover them. In many states, UM/UIM coverage includes two key components:
- Uninsured Motorist (UM) Coverage: Protects you when the at-fault driver has no insurance.
Underinsured Motorist (UIM) Coverage: Protects you when the at-fault driver’s liability insurance limits are too low to fully cover your damages.
Why Is Uninsured/Underinsured Motorist Coverage Important?
Even though most states require drivers to carry auto insurance, not everyone complies with the law, and many drivers are underinsured. According to a 2021 study by the Insurance Research Council, approximately 1 in 8 drivers in the U.S. is uninsured. Without UM/UIM coverage, you could be left with significant out-of-pocket expenses after an accident caused by one of these drivers.
Here’s why UM/UIM coverage is so important:
1. Protects You Against Uninsured Drivers
If an uninsured driver is at fault in an accident, they won’t have the liability insurance required to pay for your medical bills, property damage, or other expenses. Without UM coverage, you would be responsible for covering these costs on your own—potentially leading to financial hardship.
Example:
- An uninsured driver runs a red light and crashes into your car, resulting in $30,000 in medical expenses for you and your passengers. Without UM coverage, you’d have to pay those costs yourself.
2. Covers Gaps in Underinsured Drivers’ Policies
Even if a driver has insurance, their policy may not have high enough limits to cover all of your expenses. For example, if their policy only covers $25,000 in damages but your total costs are $50,000, you’d be left to cover the difference. UIM coverage fills that gap, ensuring you’re not stuck paying out of pocket.
Example:
- A driver with minimum liability coverage causes an accident, but their policy only covers $20,000 of your $50,000 medical expenses. With UIM coverage, your policy would pay the remaining $30,000.
3. Provides Peace of Mind
No one wants to think about being in an accident, but it’s essential to be prepared. Knowing you have UM/UIM coverage provides peace of mind that you’ll be financially protected, no matter who’s at fault or whether they have adequate insurance.
4. Covers Hit-and-Run Accidents
In many states, uninsured motorist coverage can also protect you in the event of a hit-and-run accident, where the at-fault driver flees the scene. Without this coverage, you could be left paying for damages caused by an unknown driver.
What Does UM/UIM Coverage Typically Cover?
UM/UIM coverage can help pay for a variety of expenses, including:
- Medical Bills: Hospital stays, surgeries, rehabilitation, and other medical costs.
- Lost Wages: Compensation for income lost due to injuries from the accident.
- Pain and Suffering: Non-economic damages related to physical and emotional distress.
- Funeral Expenses: In the case of a fatal accident, UM/UIM coverage may help with funeral and burial costs.
- Property Damage (in some states): Repairs to your vehicle or other property involved in the accident.
Is UM/UIM Coverage Required?
The requirement for UM/UIM coverage varies by state. Some states make it mandatory, while others consider it optional but highly recommended. Even if it’s not required where you live, adding UM/UIM coverage to your auto insurance policy is a smart financial decision.
States That Require UM/UIM Coverage:
Certain states, such as New York, Illinois, and Maryland, require drivers to carry uninsured motorist coverage. However, requirements for underinsured motorist coverage vary.
Optional in Other States:
In states where UM/UIM coverage is optional, it’s still a good idea to include it in your policy. The cost is typically affordable compared to the protection it provides.
How Much UM/UIM Coverage Do You Need?
The amount of UM/UIM coverage you need depends on your financial situation and state requirements. Many insurance experts recommend setting your UM/UIM coverage limits to match your liability coverage limits. For example:
- If your liability coverage is $100,000 per person/$300,000 per accident, aim for similar UM/UIM limits.
This ensures you have adequate protection in the event of an accident with an uninsured or underinsured driver.
Tips for Saving Money on UM/UIM Coverage
Adding UM/UIM coverage doesn’t have to break the bank. Here are a few tips to keep costs manageable:
- Bundle Your Policies: Many insurers offer discounts if you bundle your auto insurance with other policies, such as home or renters insurance.
- Raise Your Deductible: Increasing your deductible can lower your premiums, but make sure you can afford the out-of-pocket cost if you need to file a claim.
- Shop Around: Compare quotes from multiple insurance providers to find the best rate for your coverage needs.
- Maintain a Clean Driving Record: Safe driving habits help you qualify for lower rates over time.
Conclusion
Uninsured/Underinsured Motorist (UM/UIM) coverage is a vital part of any auto insurance policy. It provides financial protection in scenarios where the at-fault driver lacks adequate insurance, ensuring you’re not left paying out of pocket for medical bills, lost wages, or property damage.
Given the high number of uninsured and underinsured drivers on the road today, having UM/UIM coverage isn’t just smart—it’s essential. It offers peace of mind that, no matter what happens, you’ll have the resources to recover financially after an accident.
At The Jordan Insurance Agency, we’re committed to helping you choose the right auto insurance coverage for your needs. If you’d like to learn more about UM/UIM coverage or get a free quote, contact us today!
