Uninsured/Underinsured Motorist (UM/UIM) coverage is an optional type of auto insurance that protects you and your passengers in the event of an accident caused by a driver who either has no liability insurance (uninsured) or not enough liability insurance to cover your damages (underinsured).
Overview of Uninsured/Underinsured Motorist Coverage
Uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) are designed to safeguard individuals and their families in situations where they are involved in an accident with a driver who is either uninsured or underinsured. UM/UIM coverage steps in to cover bodily injuries, damages, or even death caused by an at-fault uninsured or hit-and-run driver. This coverage serves as an additional layer of compensation when the at-fault driver lacks insurance or has insufficient coverage to fully compensate the insured individual.
Types of UM/UIM Coverage
There are four main types of UM/UIM coverage:
| Type of Coverage | Description |
|---|---|
| Uninsured Motorist Bodily Injury (UMBI) | Covers medical expenses for you and your passengers if the at-fault driver has no liability insurance. |
| Uninsured Motorist Property Damage (UMPD) | Covers repairs or replacement of your car if the at-fault driver has no liability insurance. |
| Underinsured Motorist Bodily Injury (UIMBI) | Covers medical expenses exceeding the at-fault driver’s liability limits. |
| Underinsured Motorist Property Damage (UIMPD) | Covers the difference between the at-fault driver’s liability limits and the cost to repair or replace your car. |
Is UM/UIM Coverage Mandatory or Optional?
UM/UIM coverage requirements vary by state. In some states, UMBI and/or UIMBI coverage are mandatory, while in others, it’s optional but highly recommended.
UM/UIM Coverage Limits and Deductibles
You can choose the coverage limits for UM/UIM when purchasing your car insurance policy. Common limits are equal to your bodily injury and property damage liability limits. A deductible may apply to UMPD and UIMPD claims, but typically not to UMBI and UIMBI claims.
Benefits of UM/UIM Coverage
UM/UIM coverage can provide significant financial protection in the event of an accident with an uninsured or underinsured driver. Here are some of the benefits:
- Covers medical bills, lost wages, and pain and suffering for you and your passengers.
- Covers car repairs or replacement costs.
- Provides peace of mind knowing you’re financially protected.
Factors to Consider When Choosing UM/UIM Coverage Limits
When deciding on UM/UIM coverage limits, consider the following factors:
- The number of uninsured/underinsured drivers in your state.
- The cost of medical care in your area.
- The value of your car.
- Your personal risk tolerance.
Cost of UM/UIM Coverage
The cost of UM/UIM coverage varies depending on your location, driving record, chosen limits, and insurance company. Generally, it’s a relatively affordable addition to your car insurance policy.
FAQs
1. Is UM/UIM coverage expensive?
The cost varies depending on your location, driving record, chosen limits, and insurance company. Generally, it’s a relatively affordable addition to your car insurance policy.
2. How likely am I to need UM/UIM coverage?
The national average of uninsured drivers is around 13%, but it can be higher in certain areas. Even a small chance of encountering an uninsured driver justifies having UM/UIM coverage.
3. What happens if I’m in an accident with an uninsured driver and I don’t have UM/UIM coverage?
You may be responsible for your medical bills, lost wages, and car repairs. Suing the at-fault driver is an option, but collecting a judgment can be difficult.
4. Can I increase my UM/UIM coverage limits later?
Yes, you can usually adjust your coverage limits at any time during your policy term.
5. What if I’m unsure about how much UM/UIM coverage I need?
Talk to your insurance agent. They can assess your individual risk factors and recommend appropriate coverage limits.
Conclusion
UM/UIM coverage is a valuable form of auto insurance that can protect you financially in the event of an accident with an uninsured or underinsured driver. While it may not be mandatory in your state, it’s an investment worth considering for peace of mind and financial security.