As if being involved in an accident wasn’t bad enough, what happens when the at-fault driver doesn’t have coverage or is underinsured? While most states require drivers to maintain auto insurance, according to a study by the Insurance Research Counsel (IRC), one in eight motorists remain uninsured.
If another driver doesn’t have enough insurance coverage to pay for your medical bills, you could face extremely high costs or lengthy court battles. However, by adding uninsured motorist (UM) and underinsured motorist (UIM) coverage to your personal auto policy you can be fully protected on the road.
Coverage Overview
Auto insurance is required in most states because all drivers on the road essentially put their trust in one another to not get into an accident. As a result, your regular auto insurance policy will reimburse another driver if you are the cause of an accident. In a similar way, umbrella policies provide you with excess coverage for a number of different personal liabilities.
However, if another driver doesn’t have enough coverage to fully pay for the damage of the accident, you could be left to pay the bills yourself. Uninsured motorists simply don’t purchase an auto insurance policy. As a result, if they cause an accident, there isn’t a policy in place to reimburse you for medical bills. Underinsured motorists have an insurance policy, but don’t have a high enough coverage limit to pay for all of the expenses in the accident. Some states only require a small amount of coverage, which won’t be enough to pay all of your medical expenses.
The coverage typically has two components, but it varies from state to state:
- Coverage for bodily injury provides insurance for medical bills, funeral expenses, lost wages, pain and suffering, disfigurement and permanent or partial disability.
- Coverage for property damage provides insurance for auto repairs, total loss, rental car and damage to personal items carried in the vehicle.
The following are additional coverage considerations:
- For UM/UIM to pay, it must be established that the other driver was at fault. Comparative negligence allows for more than one person to be at fault for an accident. As a result, you can reduce the settlement of your uninsured/underinsured motorist claim by the percentage of fault attributable to you.
- UM coverage pays losses up to the coverage limits from an accident caused by a hit-and-run driver, but be sure to report the accident promptly.
Coverage Insights
Without UM or UIM coverage, you’re essentially paying more for the protection of strangers than you are for yourself and your family. And, although uninsured and underinsured drivers are all too common, many people believe that they’re already covered if someone else causes an accident.
UM and UIM policies are available, as are endorsements to umbrella policies that can protect you from uninsured or underinsured drivers. In fact, in many states, you may be required to purchase UM or UIM coverage. However, just like a normal auto policy, there are some aspects of this coverage that you should consider.
Depending on the state, you may only be required to purchase a small amount of UM or UIM coverage. However, since these policies will protect you and your family in the event of an accident, it’s generally a good idea to purchase the same amount of coverage as your regular auto policy. Coverage is also inexpensive, generally costing only 5% of your regular auto insurance premiums.
Contact us today at (800) 782 – 6995 or via the form below to examine your auto insurance coverage and ensure that you and your family are safe on the road. And be sure to like us on Facebook and follow us on LinkedIn for more industry news and tips!
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