Uninsured Motorist Coverage: Operation, Coverage, Importance

Uninsured motorist coverage provides protection in the event of an accident where the at-fault driver lacks auto insurance.

An image illustration of Uninsured Motorist Coverage
Uninsured Motorist Coverage covers in case of accidents where the driver is not covered

In tandem, underinsured motorist coverage safeguards you if the responsible driver has insufficient coverage to address the resulting damages or injuries.

Many states mandate both coverages, emphasizing their importance for all drivers. In cases of hit-and-run accidents, you can utilize your uninsured motorist coverage by filing a claim.

How Uninsured Motorist Coverage Operates

An uninsured motorist refers to an individual without liability car insurance.

In the event of an accident where the other driver is at fault, their insurance is typically responsible for covering your car repairs and medical expenses for both you and your passengers.

However, if the at-fault driver lacks insurance and is unable to cover the costs, you may find yourself burdened with the bill.

Uninsured motorist coverage is specifically designed to bridge the financial gap between your expenses and the at-fault driver’s inability to pay.

Comparison of Uninsured and Underinsured Motorist Coverage

Uninsured motorist coverage is commonly bundled with underinsured motorist coverage.

Both types of coverage address similar expenses following an accident, with a notable distinction: Uninsured motorist coverage comes into play when you’re involved in a crash with an at-fault driver who lacks insurance, while underinsured motorist coverage is reserved for accidents where the at-fault driver has some insurance but not enough to cover all incurred costs.

Is Uninsured Motorist Coverage Necessary?

While not all states mandate uninsured motorist coverage, also known as UM coverage, taking into consideration the potential risks, it is advisable to have this coverage even if your state does not require it.

The Insurance Information Institute reports that almost 13% of drivers nationwide do not possess auto insurance, with some states exceeding a 20% rate of uninsured drivers.

The absence of uninsured motorist coverage poses a significant financial risk. In the unfortunate event of an accident with an uninsured or underinsured driver, you could find yourself responsible for covering medical bills or vehicle repairs out of your own finances.

Even if you decide to file a claim against your policy, you may encounter challenges such as a substantial collision deductible or inadequate coverage for medical payments/personal injury protection, leaving you with potential financial burdens for injuries sustained by you or your passengers.

States Where Uninsured/Underinsured Motorist Coverage Obligatory?

While approximately half of the states do not enforce the requirement of uninsured and underinsured motorist coverage (UM/UIM), some states necessitate at least one of these coverages, and in certain instances, only bodily injury coverage may be mandatory.

Even in states where it is not mandatory, the option to purchase uninsured and underinsured motorist coverage may still be available.

For instance, in Illinois, both uninsured and underinsured motorist coverage is a requirement.

In New Hampshire, although car insurance is not obligatory for financial responsibility, if purchased, the state mandates the inclusion of both uninsured and underinsured motorist coverage in every policy.

On the other hand, states like Massachusetts and South Carolina only mandate uninsured motorist coverage.

What Uninsured Motorist Coverage Covers

Uninsured motorist coverage provides compensation for injuries or damages sustained by you, family members in your household, or passengers in your car following an accident with an at-fault driver who lacks insurance.

Two main types of uninsured motorist coverage exist

1. Uninsured Motorist Bodily Injury (UMBI)
– Covers medical expenses, pain and suffering, lost wages in the event of post-accident work incapacity, and funeral expenses resulting from a collision with an at-fault driver lacking car insurance. It may also extend coverage if an uninsured driver injures you as a pedestrian or while you’re cycling.

2. Uninsured Motorist Property Damage (UMPD)
– Addresses damage to your car or property following an accident with an at-fault driver who is uninsured. In states where a deductible is required for this coverage, you bear responsibility for a specific claim amount, after which your insurance covers the remainder (up to your policy limit).

For enhanced protection, you might consider full coverage insurance.

A “full coverage policy” is a term describing comprehensive, collision insurance, and meeting state minimum car insurance requirements.

Yes, uninsured motorist insurance does cover hit-and-run accidents.

You can claim against your  coverage if a driver hits your vehicle and flees the scene.

However, it’s important to note that in some states, coverage for property damage (UMPD) may not cover hit-and-run incidents.

In such cases, you would need collision coverage to address the damage to your vehicle caused by a hit-and-run driver.

Uninsured Motorist Property Damage vs. Collision Coverage

Both UMPD and collision coverage provide compensation for damage caused by a driver with little or no insurance.

However, collision coverage exclusively covers damages to your car, regardless of fault.

While UMPD, depending on state regulations, may cover damages to both your car and other property caused by an uninsured.

Do I Need Uninsured Motorist Bodily Injury Coverage if I Have Health Insurance?

While health insurance may provide overlapping coverage with Uninsured Motorist Bodily Injury (UMBI) and Underinsured Motorist Bodily Injury (UIMBI) coverage, there are considerations to bear in mind, especially in states where UMBI and UIMBI are optional:

1. Coverage for Auto Accident Injuries
– Check if your health insurance covers injuries sustained in auto accidents, as some policies may have limitations.

2. Deductibles
– Unlike health insurance, UMBI and UIMBI often do not have deductibles. If your health insurance has a high deductible, carrying UMBI and UIMBI may be advantageous.

3. Protection for Passengers
– UMBI and UIMBI coverage extends protection to passengers in your car who may not have their own health insurance.

4. Coverage for Lost Wages
– UMBI and UIMBI can cover lost wages and other damages that may not be protected under certain health insurance plans.

Carefully evaluating these factors can help you determine whether carrying UMBI and UIMBI coverage is beneficial, even if you have health insurance.

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