Accidents happen, but what if the other driver lacks sufficient insurance—or worse, none at all? This is where uninsured motorist (UM) and underinsured motorist (UIM) coverage come into play. These often-overlooked policy options can make all the difference in protecting you financially after an accident. Let’s break down these coverages to help you make informed decisions for your auto insurance policy.
What Is Uninsured Motorist Coverage?
Uninsured motorist coverage protects you in accidents involving drivers who don’t carry any liability insurance. Though most states legally require car owners to have insurance, many still drive uninsured. If an uninsured driver causes an accident that damages your car or results in injuries, UM coverage can step in to cover costs like:
- Medical bills for injuries you or your passengers incur
- Lost wages if injuries prevent you from working
- Property damage (if your policy includes uninsured motorist property damage coverage)
When You Need UM Coverage
Consider the following scenario:
You’re driving home when another car runs a red light and crashes into you. The other driver is at fault but doesn’t have insurance to pay for your medical expenses or car repairs. Without UM coverage, you may pay out of pocket or rely on your health or collision insurance. UM coverage provides a safety net, ensuring that you’re not left financially stranded due to someone else’s negligence.
What Is Underinsured Motorist Coverage?
Underinsured motorist coverage goes one step further. It applies when the at-fault driver’s insurance exists but isn’t sufficient to cover the damages or injuries caused by the accident. For example, if the at-fault driver has $25,000 of bodily injury liability coverage, but your medical bills total $50,000, UIM coverage bridges the gap between the other driver’s inadequate policy limits and the actual damages you’re entitled to receive.
What Does UIM Cover?
- Additional medical expenses beyond the at-fault driver’s liability limits
- Long-term rehabilitation costs
- Compensation for pain and suffering not fully covered by the at-fault driver’s insurance
Why Are UM and UIM Coverage Important?
According to the Insurance Research Council, about 1 in 8 drivers in the U.S. are uninsured. Even if you’re a safe driver, you can’t control who’s behind the wheel of the cars around you. Without UM or UIM coverage, you risk being responsible for significant costs following an accident caused by an uninsured or underinsured driver. These policies provide peace of mind, knowing you’re financially protected despite the irresponsibility of other drivers.
Tips for Choosing the Right Coverage
- Understand State Requirements: Many states mandate a minimum amount of UM or UIM coverage, so check your local laws before updating your policy.
- Assess Risks in Your Area: Live in a region with a high rate of uninsured drivers? Increase your UM coverage for better protection.
- Match Coverage to Your Finances: Medical expenses and car repairs can add up quickly. Consider opting for higher UM/UIM limits to avoid out-of-pocket costs.
- Talk to Your Insurer: Ask whether UM/UIM coverage is included in your policy or offered as a standalone option. Your agent can help determine the right amount of coverage for your needs.
How UIM and UM Policies Pay Out
Suppose you’re in an accident caused by an underinsured driver. Here’s how these coverages typically come into play:
- The at-fault driver’s insurance pays first. It covers as much as its policy allows, say $25,000 for bodily injury.
- Your UIM coverage bridges the gap: If your total medical bills are $50,000 and the at-fault driver’s policy only covers $25,000, your UIM policy would pay the remaining $25,000, up to your coverage limit. For uninsured motorist cases, the process is straightforward—your UM coverage kicks in to pay for all covered damages within your policy limits.
Protect Yourself on the Road
Have you been injured in an accident? These situations can be stressful and costly. Carey Leisure & Carney is here to help. Contact us for a free consultation, and let our team fight for your rights. Call us today!