What is Uninsured & Underinsured Insurance Coverage?

You are a conscientious driver. You would never think of owning, much less driving, an uninsured vehicle. Therefore, you believe that if you should suffer injury in a vehicular mishap, the insurance you carry would protect you entirely in every potential situation. If not, you assume the at-fault driver’s liability coverage would take care of your property damage and medical bills.

In a perfect world, you would be right. Nevertheless, if the driver who has caused your crash is underinsured or completely lacking in coverage, you could be sadly mistaken. You’ll find that out in a hurry if that accident has left you injured and facing expensive medical bills with no insurance there to help you pay them.

That is where uninsured/underinsured motorist coverage comes in. It exists to protect the innocent driver who finds himself injured in an accident that occurred through the fault of a driver who carries:

– No insurance of any kind.
– Insurance that fails to meet the minimum mandated requirements of his or her home state.
– Insurance that is insufficient to meet your needs.
– Insurance from a questionable company that either does not have the money to pay the claim or flat-out refuses to do so.

Of course, if the at-fault driver has chosen to flee the scene, the true extent and status of his coverage may remain a permanent mystery.

In any situation of this type, a person who has failed to protect himself with uninsured/underinsured motorist insurance is likely to find himself holding the bag.

The Two Types of Uninsured/Underinsured Motorist Coverage

UM insurance comes in two different types. These are:

– Underinsured motorist injury insurance, or UIMBI. This popular version is intended to protect your family members and others whom you have already covered under your basic auto policy whether they are passengers in your own insured vehicle or family members traveling in other cars. In addition to paying your medical costs, it may also insure against lost wages or pain and suffering. Some states require that you carry it.

– Uninsured motorist property damage coverage. Not all states offer this as an option, and even fewer require that you carry it. When you can get it, though, uninsured motorist property damage coverage should assist in paying for damage or loss to your vehicle and any valuables that happened to be in it at the time of the accident. In some cases, it will also cover the repair or replacement of your mailbox, fence or other property with which an uninsured or underinsured driver has had an excessively close encounter.

Currently, only 22 states and the District of Columbia require that drivers purchase uninsured/underinsured motorist coverage. The rest, including Arizona, California and Nevada, do not. However, no state will prohibit you from making this purchase on your own.

Choosing the Right Limits for Uninsured/Underinsured Coverage

When purchasing uninsured/underinsured auto insurance, you will have several options from which to choose. Some of them offer coverage as low as $5,000 while others commonly run as high as $1 million or more.

An appropriate amount of UM insurance will generally equal the value of your existing bodily injury coverage. In fact, some insurers will limit you to that amount of UM coverage and decline to issue anything higher, feeling that anything more would amount to overkill.

Of course, if you live in a no-fault state, it helps to keep in mind that collecting on your UM claim will likely entail a visit to the courthouse. If you come out the winner in a case like this, remember that regardless of the amount of any court-mandated award, your insurer will not compensate you for any amount in excess of your policy limit.

Fortunately, the cost of adding uninsured/underinsured insurance to your auto policy is negligible. In most cases, it will come to no more than five percent of your current insurance premium. However, if you have previously made a sizable number of insurance claims or have had a checkered history concerning traffic tickets or minor infractions, you can expect the potential impact on your wallet to rise accordingly.

Through many years of working closely with personal injury clients, the lawyers at Lloyd Baker Attorneys have found that many people believe that they already carry uninsured/underinsured motorist insurance only to find out after the fact that they do not. Nevertheless, in view of its benefits compared to its reasonable cost, we hope that all drivers will check their policies in search of UM coverage and have it added right away if it’s not already there. As always, give Lloyd Baker Injury Attorneys a call if you have any questions. We are here to help you.