Haris Ashley
Uninsured motorist coverage is an important aspect of auto insurance, providing financial protection in the event of an accident with an uninsured or underinsured driver. While some states require this coverage, it is generally available as an add-on to standard auto policies and offers valuable peace of mind. This type of coverage typically includes uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD), safeguarding against medical expenses and vehicle repairs. The cost of uninsured motorist coverage is relatively low, and stacking options can further enhance protection. However, it's essential to understand the specific laws and requirements in your state, as they vary across the country.
| Characteristics | Values |
|---|---|
| What is uninsured motorist coverage? | A type of car insurance that can pay for medical expenses if you or your passengers are injured in an auto accident caused by a driver who doesn’t have any liability car insurance, a hit-and-run driver, or a driver whose insurance company denies coverage or goes out of business. |
| What does uninsured motorist coverage pay for? | Lost wages, pain and suffering compensation, and in some states, your car’s damages if an uninsured driver hits you. |
| Is uninsured motorist coverage necessary? | If your state doesn’t require uninsured motorist coverage, you might want to add it to your auto insurance policy if you have a high deductible health insurance plan, or if you want coverage for lost wages, pain and suffering, and funeral expenses. |
| Which states require uninsured motorist coverage? | 20 states and Washington, D.C., require drivers to carry uninsured motorist coverage. In Virginia, car insurance isn’t mandatory, but if drivers purchase a policy, it must include both uninsured motorist bodily injury and property damage coverage. |
| How much does uninsured motorist coverage cost? | Uninsured motorist coverage costs an average of $136 a year. |
| Can you reject uninsured motorist coverage? | In some states, you can reject uninsured motorist coverage in writing. |
| What are the minimum liability limits? | $15,000 for the death or injury of any one person, $30,000 for the death or injury of more than one person in any one accident, and $5,000 for damage to the property of other people. |
| What is the difference between uninsured motorist coverage and underinsured motorist coverage? | Uninsured motorist coverage pays for your medical bills and other expenses when you’re hit by someone who doesn’t have auto liability insurance. Underinsured motorist coverage pays for medical bills and other expenses when you’re hit by someone who doesn’t have enough insurance. |
What You'll Learn
What is uninsured motorist coverage?
Uninsured motorist coverage is a type of car insurance that covers you if you're hit by a driver with no auto insurance or not enough insurance to pay for the damages. It is often referred to as UM or UMBI and is mandatory in some states. It can pay for medical expenses, lost wages, and property damage. It can also cover hit-and-run accidents.
Uninsured motorist coverage functions much like Bodily Injury Automobile Insurance coverage. It provides insurance coverage to the policyholder for damages caused by a negligent driver who does not have insurance. There are two main types of uninsured motorist coverage:
- Uninsured motorist bodily injury (UM or UMBI): This type of insurance covers a driver involved in an accident caused by an uninsured driver. It covers damages related to physical injuries, such as medical expenses.
- Uninsured motorist property damage (UMPD): This type of insurance covers damage to your car if it is hit by someone without insurance. In some states, UMPD can also cover hit-and-run accidents.
Underinsured motorist coverage (UIM) is similar to uninsured motorist coverage but applies when the at-fault driver has insufficient insurance to cover the damages. UIM includes:
- Underinsured motorist bodily injury (UIM or UIMBI): This covers damages related to bodily injury when the at-fault driver's insurance is not enough to cover the costs.
- Underinsured motorist property damage (UIMPD): This covers damage to your car when the at-fault driver's insurance is insufficient.
Uninsured motorist coverage is important because it protects you financially in the event of an accident with an uninsured or underinsured driver. Without it, you could be responsible for paying for medical bills, lost wages, and vehicle repairs out of pocket. It is a way to ensure you have the financial resources to cover the costs associated with a motor vehicle accident.
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What does it pay for?
Uninsured motorist coverage can pay for a range of expenses resulting from an accident involving an uninsured or underinsured driver. Here are some of the key areas it covers:
- Medical Expenses: Uninsured motorist coverage can pay for medical bills resulting from injuries sustained in an accident. This includes hospital appointments, transportation to and from medical facilities, and future medical expenses related to the accident.
- Lost Wages: This coverage compensates for lost wages if you are unable to work due to the accident. It may also cover potential future earnings you would have made.
- Property Damage: You can claim for damage to your vehicle or valuable items inside it at the time of the collision.
- Pain and Suffering: In some cases, uninsured motorist coverage may provide compensation for pain and suffering resulting from the accident. This typically requires meeting a "permanent injury threshold" as defined by state laws.
- Wrongful Death: Uninsured motorist coverage can help file a wrongful death claim to recover compensation for funeral costs and loss of consortium.
It's important to note that the specific coverages and limits may vary by state and insurance provider. Be sure to review your policy carefully to understand what is included in your uninsured motorist coverage.
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Which states require it?
In the US, auto liability insurance is mandatory in 49 states and the District of Columbia. The only state that does not require auto liability insurance is New Hampshire, which instead requires drivers to show that they can provide sufficient funds in the case of an at-fault accident.
Uninsured motorist coverage (UM) is mandatory in about 20 jurisdictions, including Connecticut, the District of Columbia, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, and Wisconsin. UM coverage provides compensation to policyholders when an at-fault driver does not have liability insurance or leaves the scene of the crash.
In addition to the states that require UM coverage, some states mandate underinsured motorist coverage (UIM). UIM coverage provides financial protection when the at-fault driver carries insurance, but their coverage is insufficient to pay for all expenses. UIM coverage is required in 14 states: Connecticut, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oregon, South Dakota, Vermont, Virginia, and Wisconsin.
While not all states mandate UM/UIM coverage, it is highly recommended for all drivers. According to the Insurance Information Institute, nearly 13% of drivers countrywide do not have auto insurance, and in some states, the number of uninsured drivers exceeds 20%. Even if UM/UIM coverage is not required in a particular state, it can provide valuable protection in the event of an accident with an uninsured or underinsured driver.
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How much does it cost?
The cost of uninsured motorist coverage varies depending on the state and the insurance company. According to Forbes Advisor, uninsured motorist coverage costs an average of $136 per year. However, this cost can vary depending on the specific coverage options you choose.
Uninsured motorist coverage typically includes uninsured motorist bodily injury (UMBI) and, in some states, uninsured motorist property damage (UMPD). The cost of UMBI coverage is usually based on the amount of coverage you select, with higher coverage limits resulting in higher premiums. For example, if you choose $100,000 of UMBI coverage, you can expect to pay a higher premium than if you chose $50,000 of coverage.
In addition to the type and amount of coverage, the cost of uninsured motorist insurance can also depend on factors such as your driving record, age, gender, and the make and model of your vehicle. If you live in a state with a high rate of uninsured drivers, you may also pay a higher premium for uninsured motorist coverage.
It's important to note that uninsured motorist coverage is usually offered as an add-on to your existing auto insurance policy. This means that you cannot purchase uninsured motorist coverage on its own; you must also have a basic auto insurance liability policy in place. As a result, the total cost of your auto insurance will increase if you add uninsured motorist coverage.
When deciding whether to purchase uninsured motorist coverage, it's essential to weigh the potential costs against the potential benefits. While the coverage can provide financial protection in the event of an accident with an uninsured driver, it may also increase your insurance premiums. Carefully review the terms and conditions of the coverage, including the coverage limits, deductibles, and exclusions, to ensure that it aligns with your needs and budget.
To get the best rates, it's recommended to shop around and compare quotes from multiple insurance providers. By doing so, you can find the most affordable option that meets your specific needs. Additionally, consider the reputation and financial stability of the insurance company to ensure that they will be able to pay out your claims if needed.
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What is 'stacked' uninsured motorist coverage?
Stacked uninsured motorist coverage is a way to maximise your underinsured motorist benefits when you are involved in an accident caused by an uninsured or underinsured driver. Stacking insurance allows you to combine the UM/UIM coverage limits from multiple policies to create more coverage that can offset the expenses incurred for post-injury care, wage losses, and non-economic damages.
Stacked UM insurance is available to drivers in about thirty states, including Florida, who insure more than one vehicle or have more than one insurance policy for a single car. For example, if your auto policy has $100,000 of UM coverage and you insure two vehicles, the stacked UM provides $200,000 of coverage. Even if you insure only one vehicle, stacked UM coverage in Florida can sometimes provide UM coverage when unstacked UM would not, especially if you or other family members have other auto insurance policies in the household.
The choice to stack your insurance can be made when you sign up for your policy, or it can be added at a later date. The only real disadvantage of stacked insurance is that you will typically pay slightly higher premiums for higher coverage limits. This means when you stack UM and UIM limits, you will likely pay more for that coverage.
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Frequently asked questions
Uninsured motorist coverage is a type of auto insurance that covers medical expenses and property damage resulting from an accident caused by an uninsured or underinsured driver. It also covers hit-and-run accidents.
When you are in an accident caused by another driver, their insurance is supposed to cover your expenses. However, if they are uninsured, your uninsured motorist coverage will cover the costs instead, up to your policy limit.
Uninsured motorist coverage can provide financial protection in the event of an accident with an uninsured or underinsured driver. It can cover medical expenses, property damage, lost wages, and pain and suffering.
The cost of uninsured motorist coverage varies depending on factors such as the state you live in and the number of uninsured drivers in that state. On average, it costs around $136 per year.
Uninsured motorist coverage is required in some states, while in others it is optional. It is generally recommended to have this coverage to protect yourself financially in case of an accident with an uninsured driver.
