Uninsured motorist coverage protects you when an uninsured driver hits your vehicle. This insurance fills the financial gap when the at-fault driver has no insurance to pay for your injuries or property damage. This coverage is essential for your financial protection. In this guide, you’ll learn everything you need to know about uninsured motorist coverage and how it safeguards your interests.
What Is Uninsured Motorist Coverage?
Nearly 14% of drivers in the United States don’t carry insurance, says a 2023 study by the Insurance Research Council (IRC). Uninsured motorist coverage is an insurance policy that pays for your medical bills, lost wages, and vehicle damage when an uninsured driver causes an accident. This protection ensures you won’t face overwhelming expenses because another driver failed to maintain proper insurance.
Similar to the liability coverage (bodily injury and property damage) on your auto policy, typically a single set of limits for uninsured/underinsured motorist coverage (UM/UIM) applies across all vehicles on your policy. For example, you might see something like “UM/UIM 100/300” on your auto policy. In this example, the “100” refers to the maximum amount ($100,000) your insurer will pay for injuries to any one individual in an accident caused by an uninsured or underinsured driver. The “300” refers to the total amount ($300,000) your insurer will pay for injuries to everyone in the vehicle. Said in a different way: the first number is typically a per-person limit, and the second number is typically a per-accident limit.
Types of Uninsured Motorist Protection
Uninsured motorist bodily injury coverage (UMBI) pays for medical expenses, lost wages, and pain and suffering if you’re injured in an accident. This coverage extends to passengers in your vehicle and family members living in your household. Uninsured motorist property damage coverage (UMPD) handles repairs to your vehicle and other property damaged in the accident.
Key Benefits of This Coverage
This insurance provides peace of mind knowing you’re protected against uninsured drivers. The coverage pays for medical bills, rehabilitation costs, and lost income while you recover. You also receive compensation for pain and suffering, which isn’t available through basic medical coverage.
How Uninsured Motorist Coverage Works
When you’re in an accident with an uninsured driver, your coverage steps in to handle expenses the other driver should have paid. This insurance works similarly to liability coverage, but your own insurance company manages the claim instead of the at-fault driver’s insurer.
To file a claim, contact your insurance company immediately after the accident. Document the scene with photos, gather witness information, and file a police report. Your insurance company will verify the other driver lacks coverage before processing your claim.
Coverage Limits And Deductibles
Your policy includes specific coverage limits, typically matching your liability coverage amounts. For example, if you have $50,000 in liability coverage, your uninsured motorist coverage will likely be $50,000. Deductibles for this coverage can vary but are typically a couple hundred dollars.
State-Specific Requirements
Twenty states and the District of Columbia have mandatory requirements for uninsured or underinsured motorist coverage. Each state sets its own minimum coverage requirements and regulations. Some states combine uninsured and underinsured coverage into one policy, while others treat them separately.
When to Use Uninsured Motorist Coverage
Your uninsured motorist coverage activates when you’re involved in an accident with a driver who has no insurance. This protection also applies in hit-and-run accidents where the responsible driver can’t be identified.
Scenarios Where Coverage Applies
Your coverage applies in these situations:
- Accidents with drivers who have no insurance
- Hit-and-run incidents
- Pedestrian accidents caused by uninsured drivers
- Accidents where the at-fault driver’s insurance has lapsed
- Crashes involving stolen vehicles
Situations Not Covered By This Protection
This coverage doesn’t apply when:
- You cause the accident
- The other driver has adequate insurance
- You’re using your vehicle for commercial purposes
- You’re driving outside your policy’s coverage area
- The damage occurs from non-collision incidents
Costs And Factors Affecting Premium Rates
The cost of uninsured motorist coverage varies based on several factors, including your location and coverage limits. This protection typically adds a modest amount to your overall insurance premium.
Average Premium Costs By State
Premium costs vary significantly by state, reflecting the percentage of uninsured drivers in each area. States with higher numbers of uninsured drivers typically have higher premium rates. The Insurance Information Institute has found that Washington D.C. has the highest rate of uninsured motorists (25.2%), and Wyoming has the lowest (5.9%).
Uninsured Vs. Underinsured Motorist Coverage
These two types of coverage work together to provide complete protection against drivers with inadequate insurance. Understanding the differences helps you choose the right combination for your needs.
Uninsured motorist coverage handles accidents with drivers who have no insurance, while underinsured coverage applies when the at-fault driver’s insurance isn’t enough to cover your expenses; your policy kicks in to make up the difference up to your UIM limits. The main difference lies in when each type of coverage takes effect.
In certain states, you can “stack” UM/UIM limits if you have multiple vehicles on the same policy (or multiple policies). For example, if you have UM 50/100 for each of two insured vehicles and your state allows stacking, you might be able to combine the limits for a total of 100/200. Stacking rules vary by state, so your ability to do this depends on local regulations and the terms of your policy.
Common Myths About Uninsured Motorist Coverage
Understanding the truth about uninsured motorist coverage helps you make informed decisions about your insurance needs.
Many people believe their health insurance eliminates the need for uninsured motorist coverage. However, health insurance doesn’t cover lost wages, pain and suffering, or property damage. Another common myth is that this coverage is unnecessary if you have collision coverage.
How to Choose the Right Coverage Amount
Selecting appropriate coverage limits protects your financial interests without overpaying for unnecessary coverage. Review your existing coverage before adding uninsured motorist protection. Match your coverage limits to your liability coverage for balanced protection. Consider higher limits if you have significant assets or live in an area with many uninsured drivers.
Our Conclusion
Uninsured motorist coverage provides essential protection in today’s driving environment. With millions of uninsured drivers on the road, this coverage ensures you won’t face financial hardship because of someone else’s lack of responsibility.
While the cost adds to your insurance premium, the protection offered far outweighs the expense. Consider your personal circumstances, state requirements, and risk factors when selecting coverage limits to create the right protection plan for your needs.
