Uninsured/Underinsured Motorist Insurance
Uninsured/underinsured motorist insurance (UM/UIM) is a type of auto insurance coverage that protects you if you're involved in an accident with a driver who either has no insurance or not enough insurance to cover the damages they caused.
Uninsured motorist insurance, also known as uninsured motor vehicle insurance, covers you in the event that you are hit by a driver who doesn't have insurance at all. Underinsured motorist coverage, on the other hand, comes into play when the other driver's insurance policy limits are not enough to cover the damages you suffered in the accident.
UM/UIM insurance typically covers bodily injury and property damage, and it may also cover lost wages, medical expenses, and other costs associated with the accident. The coverage limits of UM/UIM insurance depend on your policy and the laws and regulations of your state.
In some states, UM/UIM insurance is mandatory, while in others, it is optional. Even if it is not required by law, it can be a wise investment to protect yourself and your passengers in case of an accident with an uninsured or underinsured driver.
Understand the Benefits & Risks of Uninsured Motorists Insurance
Uninsured motorist insurance (UM) and underinsured motorist insurance (UIM) offer several benefits to policyholders. However, there are also some risks associated with these types of coverage. Here are some of the benefits and risks of uninsured motorist insurance:
Benefits:
- Protection against uninsured or underinsured drivers: UM and UIM insurance provides financial protection in the event that you are involved in an accident with a driver who has no insurance or insufficient coverage to pay for your damages.
- Peace of mind: UM and UIM insurance provide peace of mind knowing that you and your passengers will be covered if you are involved in an accident with an uninsured or underinsured driver.
- Coverage for hit-and-run accidents: UM coverage also provides coverage if you are involved in a hit-and-run accident, where the driver cannot be identified.
Risks:
- Increased insurance premiums: UM and UIM coverage may increase your insurance premiums. However, the cost of UM and UIM coverage is generally lower than the cost of liability coverage, which is required in most states.
- Reduced UIM limits: Some insurance companies may offer reduced UIM coverage limits. This means that if you are involved in an accident with an underinsured driver, your UIM coverage may not be enough to cover all of your damages.
- Potential for fraud: There is a risk of fraud associated with UM and UIM coverage. Some people may file false claims, which can increase insurance premiums for everyone.
Overall, uninsured motorist insurance provides valuable protection against uninsured and underinsured drivers. It is important to review your policy and understand your coverage limits to ensure that you have adequate protection in the event of an accident.
How to Choose the Right Coverage for Uninsured/Underinsured Drivers?
Choosing the right coverage for uninsured/underinsured drivers (UM/UIM) can be confusing. Here are some factors to consider when choosing UM/UIM coverage:
- State requirements: Check your state's minimum UM/UIM coverage requirements. Some states require UM/UIM coverage, while others do not. Even if your state doesn't require UM/UIM coverage, it's still a good idea to consider it for added protection.
- Your assets: Consider how much coverage you need to protect your assets in the event of an accident with an uninsured or underinsured driver.
- Your budget: UM/UIM coverage can add to your insurance premium, so consider your budget when choosing coverage limits. You may want to consider increasing your deductible to lower your premium.
- Additional insureds: If you have additional drivers on your policy, make sure they are also covered by UM/UIM insurance.
- Type of vehicle: The type of vehicle you drive can affect the cost of UM/UIM coverage. For example, motorcycles may require higher UM/UIM coverage limits due to the increased risk of injury in an accident.
- Insurance company: Choose a reputable insurance company with a good track record of handling claims related to UM/UIM coverage.
Overall, it's important to carefully consider your coverage needs and budget when choosing UM/UIM coverage. Don't hesitate to ask questions and seek advice from an insurance agent to ensure you are adequately protected in the event of an accident with an uninsured or underinsured driver.