Understanding Uninsured Auto Insurance Coverage: What's The Deal?

Uninsured motorist coverage is a type of car insurance that can pay for medical expenses and damage to your car if you or your passengers are injured in an accident caused by a driver who doesn't have any insurance or enough insurance. This type of insurance is important because, in the event of an accident, it can help cover costs that you might otherwise have to pay out of pocket. It's also mandatory in many states and highly recommended for all drivers, as it provides financial protection and peace of mind in case of an accident with an uninsured or underinsured driver.

Uninsured motorist bodily injury (UMBI)

• A driver who doesn’t have any liability car insurance
• A hit-and-run driver
• A driver whose insurance company denies coverage or goes out of business

UMBI may pay medical bills for both you and your passengers if you're hit by a driver with no insurance. It's important to note that UMBI doesn't include a deductible, so you won't have to pay anything out of pocket when making a claim.

In addition to medical expenses, UMBI can also provide compensation for pain and suffering and lost wages if you're unable to work due to the accident. This coverage ensures that you're not left with financial burdens on top of dealing with injuries and recovery.

The amount of UMBI coverage you need depends on your state's requirements and your personal situation. Some states require drivers to carry UMBI, while in others it is optional. It's recommended to have UMBI coverage that matches your liability coverage limits. For example, if your liability limits are $50,000 per person and $100,000 per accident, you should consider the same limits for UMBI.

UMBI is an essential protection to have, especially considering that about one in eight motorists is uninsured, according to the Insurance Research Council. By having UMBI coverage, you can ensure that you and your passengers are financially protected in the event of an accident with an uninsured driver.

Underinsured motorist bodily injury (UIMBI)

UIMBI covers the medical bills of both the policyholder and their passengers if they are injured in a car accident caused by a driver who doesn't have enough liability insurance. It ensures that you and your passengers can receive the necessary medical treatment without having to worry about the financial burden.

UIMBI comes into play when the at-fault driver's insurance coverage is insufficient to fully compensate you and your passengers for your injuries. This can happen if their liability limits are too low or if multiple people are injured in the accident, exhausting the other driver's insurance coverage.

UIMBI steps in to fill the gap between the at-fault driver's insurance coverage and the total amount needed to cover the medical expenses of those injured in the accident. It helps ensure that you and your passengers can receive the necessary medical care and treatment without facing financial hardship.

Without UIMBI, you could be left with significant out-of-pocket expenses if you or your passengers are injured in an accident with an underinsured driver. Medical bills can be costly, and UIMBI provides valuable protection against these unexpected financial burdens. It gives you peace of mind, knowing that you have additional coverage beyond what the at-fault driver's insurance can provide.

The amount of UIMBI coverage you need depends on various factors. It is generally recommended to have UIMBI limits that match your liability coverage limits. For example, if your liability coverage is $100,000 per person and $300,000 per accident, you should consider purchasing UIMBI coverage with the same limits. This ensures that you have adequate protection in case of a severe accident with an underinsured driver.

In conclusion, UIMBI is a crucial component of car insurance that protects you and your passengers in the event of an accident with an underinsured driver. By helping to cover medical expenses, UIMBI provides financial peace of mind and ensures that you can focus on recovery without the added stress of overwhelming medical bills.

Uninsured motorist property damage (UMPD)

UMPD can also cover extra costs if the other driver doesn't have enough property damage liability insurance and can protect you if an uninsured or underinsured driver damages your home or other property.

UMPD is a car insurance requirement in a few states, including Maryland, New Hampshire, North Carolina, South Carolina, Vermont, Virginia, Washington, D.C., and West Virginia. It's offered as an optional coverage in several other states, and unavailable in about half of all states.

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

UMPD is often combined with uninsured motorist bodily injury coverage (UMBI), which covers injuries to yourself and your passengers in an accident with an uninsured driver.

Underinsured motorist property damage (UIMPD)

UIMPD covers the gap between the at-fault driver's insurance limit and the cost of repairing your vehicle. For example, if the at-fault driver has an insurance limit of $10,000, but the cost of repairing your vehicle is $15,000, UIMPD would cover the remaining $5,000.

UIMPD is required in some states and optional in others. The coverage limit for UIMPD is usually the same as your property damage liability insurance limit. Some states also require a deductible for UIMPD coverage, which is the amount subtracted from the claim payout. The deductible for UIMPD coverage typically ranges from $200 to $500.

It's important to note that UIMPD only covers damage to your vehicle and property, not any medical expenses or other costs associated with the accident. To cover those expenses, you would need underinsured motorist bodily injury (UIMBI) coverage, which is a separate type of insurance.

UIMPD can provide valuable protection if you are hit by a driver who does not have sufficient insurance. However, it is not required in all states, and you may already have similar coverage through collision insurance, which covers damage to your vehicle regardless of who is at fault. Ultimately, the decision to purchase UIMPD depends on your state's requirements, your existing coverage, and your desire for additional protection.

Medical bills and lost wages

Uninsured motorist coverage can help cover medical bills and lost wages for you and your passengers if you're in an accident with an uninsured or underinsured driver. This type of insurance is important because nearly 13% of drivers countrywide don't have auto insurance, and in some states, the number of uninsured drivers is over 20%. Without this coverage, you could be left paying for medical bills and repairs out of pocket.

Uninsured motorist bodily injury (UMBI) coverage can help pay medical bills for both you and your passengers if the other driver is uninsured. Underinsured motorist bodily injury (UIMBI) coverage can help pay medical bills if the other driver doesn't have enough insurance. These coverages are especially important if you have high-deductible health insurance or no health insurance at all, as they can help cover medical expenses that your health insurance might not. Additionally, UMBI and UIMBI sometimes cover lost wages, which health insurance typically doesn't.

In addition to medical bills and lost wages, uninsured motorist coverage can also provide compensation for pain and suffering and funeral expenses. This coverage is designed to protect you financially in the event of an accident with an uninsured or underinsured driver, so you don't have to worry about how you'll pay for unexpected medical bills and other expenses.

If you're considering adding uninsured motorist coverage to your policy, it's essential to understand the specifics of the coverage and how it can benefit you. While it's not required in all states, it's highly recommended for all drivers due to the high number of uninsured drivers on the road. By adding this coverage to your policy, you can gain peace of mind knowing that you're protected financially in the event of an accident.

Frequently asked questions