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Car Insurance

Uninsured motorist coverage: what is it and do I need it?

An accident with an uninsured driver can lead to serious expenses that aren’t covered by a basic liability policy. Luckily, car insurance companies offer a solution called uninsured motorist coverage.

Getting into an accident with another driver is bad enough, but what can make it even worse is if the other driver is found at-fault and doesn’t have any car insurance. Suddenly, what was suppose to be taken care of by someone else’s insurance provider is now your problem. Where is your compensation for an accident you didn’t even cause? You should never have to worry about paying medical bills when you’re the victim of another’s reckless driving. Luckily, insurance companies offer a solution called uninsured motorist coverage.

What is uninsured motorist coverage?

Drivers in the United States are required by law to carry an auto insurance policy in order to protect themselves and others in the event of an accident. Yet, the Insurance Research Council reports that nearly 14% of drivers operate uninsured. With over 210 million drivers in the states, that percentage equals 29.4 million individuals driving illegally and putting others’ compensation at risk. An accident with an uninsured driver can lead to serious expenses that aren’t covered by a basic liability policy. This leaves the victim of the accident at a loss for how to cover medical bills.

In order to protect those that do adhere to auto insurance laws, many states require drivers to add uninsured motorist coverage (UM), also known as uninsured motorist bodily injury coverage (UMBI), to their policy. Currently, 21 states in the U.S. require this coverage. Check the interactive map below to see which states have set minimum requirements for this coverage. This additional coverage helps cover the costs of injuries caused by an accident with an uninsured driver. While uninsured motorist coverage only applies to medical bills, some insurance companies offer uninsured motorist coverage for property damage to your car and other personal items.

What are uninsured coverage limits?

Whether your state requires uninsured motorist coverage or it’s an option you’d like to include on your policy, it’s important to understand coverage limits. If your state requires this coverage, the limits are most likely set for you, but you always have the option to choose higher limits that afford you more coverage.

The majority of coverages come as split limits, meaning that your insurance will depend on how many individuals were injured in the accident. A split limit usually involves two numbers and can look something like this: $15,000/$30,000. $15,000 is the maximum amount your insurance company will pay for any single person involved in an accident and $30,000 is the maximum amount your insurance company will pay for all individuals involved in an accident. For example, let’s say you caused an accident and one person was injured. Their medical bills total $30,000, but your coverage limit is $15,000 per person. You would end up having to cover the remaining $15,000. Therefore it’s always important to choose coverage that fit your needs so that you never have to pay out of pocket.

Another form of coverage is a combined single limit. This coverage gives you the option to choose a one amount that your insurance provider will pay for all bodily injury expenses in an accident. For example, you caused an accident and three people are injured with a total medical bill cost of $20,000. However, your combined single limit policy covers up to $30,000 for an accident so you won’t have to pay out of pocket for these specific injuries.

What does uninsured motorist bodily injury cover?

In the event of an accident, uninsured motorist coverage will protect you and your passengers against medical expenses, pain and suffering, and lost wages. This coverage still applies to victims of a hit and run incident. In some cases the at-fault driver has insurance, but not enough to cover all of your medical bills. For unfortunate situations like this, underinsured motorist coverage is available to mitigate these costs. Underinsured motorist coverage is only required by some states, so be sure to talk to your agent about whether or not this would be an option for you.

What does uninsured motorist property damage cover?

Uninsured motorist property damage (UMPD) isn’t required by every state and might not be available in your state at all. If it is available however, it will cover you in the event someone without insurance or collectible assets causes damage to your vehicle or other personal possessions, like a mailbox or cell phone. If the at-fault driver can’t pay to recover your damages, your UMPD will kick in. Consider buying this coverage if you’re concerned about the significant bills that could come with property damage.

How much coverage should I have?

According to the Insurance Research Council, the average cost of a bodily injury claim in 2012 was $14,600. However, it’s still recommended that you purchase as much coverage as you can afford because costs can quickly get out of control if you’re found at-fault for an accident with multiple injuries or death. If these expenses exceed your coverage limits, the other party could sue you for the remaining balance and your assets would be in danger.

While it’s difficult to decide how much coverage you should include on your policy, quote comparison sites like Insurify.com are making shopping for car insurance easier than ever. Insurify allows you to customize, build, compare, and purchase a policy online all while having communication with our knowledgeable and supportive agents. You’ll feel confident in the coverage you choose and be able to ride a little more carefree.