Uninsured Motorist Insurance: Is It Necessary?

Uninsured motorist coverage is a type of car insurance that covers your costs if you're in an accident with an uninsured driver. It is mandatory in many states and highly recommended for all drivers, as nearly 13% of drivers countrywide don't have auto insurance. If you don't have this coverage and are in an accident with an uninsured driver, you could be responsible for paying your own medical bills or vehicle repairs out of pocket.

Uninsured motorist bodily injury coverage

In the unfortunate event of an accident with an uninsured driver, UMBI can help pay for your medical treatments and any associated costs. This includes situations where you are injured as a pedestrian by an uninsured driver. UMBI typically has no deductible, so you can access these benefits without having to pay any additional costs out of pocket.

The amount of UMBI coverage you need depends on your state's requirements and your personal situation. In some states, the minimum UMBI coverage amount is set to match your liability coverage limits. For example, if your liability limits are $100,000 per person and $300,000 per accident, you would need to purchase UMBI coverage with the same limits. It is important to review the specific requirements and options available in your state.

UMBI is a crucial form of protection, especially considering that a significant number of drivers are uninsured. According to the Insurance Research Council, about one in eight motorists is uninsured, and in some states, the number of uninsured drivers exceeds 20%. By having UMBI coverage, you can have peace of mind knowing that you and your passengers are financially protected in the event of an accident with an uninsured driver.

Uninsured motorist property damage coverage

UMPD covers damage to your vehicle and, in some states, your belongings, if an uninsured or underinsured driver is at fault. It is important to note that UMPD only covers damage caused by a driver with little or no insurance. In contrast, collision coverage applies to any damage to your vehicle caused by a collision with another vehicle or object, regardless of fault.

The key difference between UMPD and collision coverage is that UMPD only covers damage caused by a driver with inadequate insurance, whereas collision coverage is broader and applies to any collision with another vehicle or object. If you're primarily concerned about damage to your vehicle, collision coverage may be a better option as it offers protection in more scenarios.

UMPD is typically combined with uninsured motorist bodily injury coverage (UMBI), which pays for injuries sustained in a crash with an at-fault driver who has no car insurance. UMBI covers medical bills for both you and your passengers.

UMPD has a limit to how much it will pay out, typically the same as your property damage liability insurance. Some states require a deductible for UMPD coverage, which is subtracted from the claim payout.

In summary, UMPD is a valuable form of auto insurance that can provide financial protection if you are hit by an uninsured or underinsured driver. However, it is essential to understand the limitations of UMPD and how it differs from collision coverage to make an informed decision about your insurance needs.

Underinsured motorist coverage

In the unfortunate event of an accident, underinsured motorist coverage will pay the difference between the damages incurred and the insurance available on the at-fault vehicle. This ensures that the victim is adequately compensated for their injuries and losses. For example, if you have $100,000 in damages, the at-fault driver has a $30,000 policy limit, and you have a $50,000 underinsured motorist policy, you would receive $80,000 in total ($30,000 from the at-fault driver's policy and $50,000 from your underinsured motorist coverage).

The importance of underinsured motorist coverage cannot be overstated, especially considering the high number of uninsured drivers on the road. According to the Insurance Information Institute, nearly 13% of drivers countrywide do not have auto insurance, and in some states, this number exceeds 20%. Without adequate coverage, you could be left paying for medical bills and vehicle repairs out of your own pocket.

When deciding on the amount of underinsured motorist coverage to purchase, it is essential to consider your own needs and the potential costs of a serious accident. By choosing an appropriate level of coverage, you can ensure that you and your family are adequately protected financially in the event of an accident with an underinsured driver.

Do I need it if I have health insurance?

Uninsured motorist coverage is a type of insurance that covers your injuries and damages in the event of an accident caused by a driver with insufficient or no insurance. It is mandatory in many states and highly recommended for all drivers, as it offers protection against the financial burden of medical bills, vehicle repairs, and other expenses that may arise from such incidents.

Even if you have health insurance, there are several reasons why you should still consider uninsured motorist coverage:

• Health Insurance Coverage Limitations: While health insurance covers medical bills, it may not extend to all expenses related to a car accident. For instance, Medicare and Medicaid typically require exhausting other insurance sources first. Private health insurance plans may also have varying levels of coverage for injuries sustained in auto accidents, and some doctors may refuse to see patients involved in car accident claims. Uninsured motorist coverage, on the other hand, specifically addresses these scenarios and ensures that you and your passengers receive the necessary financial support.
• Deductibles and Out-of-Pocket Expenses: If your health insurance has a high deductible or copays, uninsured motorist coverage can help fill those gaps. It typically has no deductible, so you won't have to worry about additional out-of-pocket expenses on top of your health insurance responsibilities.
• Lost Wages and Other Benefits: Uninsured motorist coverage often includes benefits that health insurance doesn't provide. It can cover lost wages if you're unable to work due to your injuries, as well as pain and suffering compensation. In some cases, it may even provide funeral expenses and cover property damage beyond your vehicle, such as damage to your business premises or personal property within your car.
• Protection Against Uninsured Drivers: According to the Insurance Research Council, about one in eight drivers is uninsured. This means there's a significant chance you could be involved in an accident with an uninsured driver. Without uninsured motorist coverage, you might have to pay for all the expenses yourself or take legal action, which can be a lengthy and challenging process.
• State Requirements: If your state mandates uninsured motorist coverage, you must have it, regardless of whether you have health insurance. Even if it's not mandatory in your state, it's a wise precaution given the potential consequences of being in an accident with an uninsured or underinsured driver.

In summary, while health insurance is essential, it doesn't provide the same level of protection as uninsured motorist coverage in the event of a car accident. Both types of insurance serve different purposes and can work together to ensure you're financially protected in a variety of scenarios.

Is it worth getting?

Uninsured motorist coverage is not mandatory in all states, but it is highly recommended for all drivers. It is designed to protect you if you are hit by a driver who has no auto insurance or does not have enough coverage to pay for the damages or injuries they caused. This type of insurance can provide financial protection and peace of mind in the event of an accident with an uninsured or underinsured driver.

• Protection from Uninsured Drivers: According to the Insurance Research Council, about one in eight drivers, or approximately 13% of drivers nationwide, do not have auto insurance. In some states, the percentage of uninsured drivers is even higher, exceeding 20%. If you are involved in an accident with an uninsured driver, you could be left paying for medical bills or vehicle repairs out of your own pocket. Uninsured motorist coverage can help protect you from these financial risks.
• Coverage for Underinsured Drivers: Uninsured motorist coverage typically includes underinsured motorist protection, which covers the difference when a driver doesn't have enough insurance to pay for the damages or injuries they caused. This ensures that you are not left with insufficient compensation to cover your expenses.
• Medical Bills and Lost Wages: Uninsured motorist coverage can help pay for medical expenses, including hospitalisation and ongoing care. It can also provide compensation for lost wages if you are unable to work due to injuries sustained in the accident.
• Hit-and-Run Accidents: In many states, uninsured motorist coverage includes protection against hit-and-run accidents. This means that if you are a victim of a hit-and-run, you can file a claim and receive compensation for your injuries or vehicle damage.
• Affordable Coverage: Uninsured motorist coverage is relatively inexpensive, costing around $136 per year on average. The cost may vary depending on the state and the number of uninsured drivers in the area, but it is generally much lower than the potential expenses you could face without this coverage.
• Additional Benefits: Uninsured motorist coverage can provide benefits beyond medical and repair expenses. It may include compensation for pain and suffering, funeral expenses, and other damages not typically covered by health insurance.

While it may not be mandatory in your state, uninsured motorist coverage can provide valuable financial protection in the event of an accident with an uninsured or underinsured driver. It is important to weigh the potential risks and expenses you could face without this coverage and decide if the relatively low cost of uninsured motorist insurance is worth the added security and peace of mind.

Frequently asked questions