Uninsured motorist coverage, also known as uninsured motorist bodily injury coverage, is coverage required in some states that covers expenses related to injuries and vehicle damage if you’re the victim of a motor vehicle accident in which the at-fault driver doesn’t have insurance. Rising insurance costs are leading more drivers to ignore their state’s minimum auto insurance laws, increasing the likelihood of being involved in an accident with an uninsured motorist. So instead of playing a game of chance, Bankrate explains why adding uninsured motorist coverage to your policy, even if it’s optional in your state, can be a worthwhile investment.
What is Uninsured Motorist Coverage?
Uninsured Motorist Coverage (UM) is a type of auto insurance that provides financial protection for you and your passengers if the at-fault party does not have insurance and their insurance does not cover your injuries or damages. Without this type of insurance, you may have to pay out-of-pocket for medical expenses and vehicle repairs if you are in an accident where you are not at fault or if an uninsured driver hits you, a pedestrian.
While uninsured motorist coverage generally falls into these two categories, whether you are required to have uninsured motorist coverage and the specific coverage it provides vary from state to state.
- Uninsured Motorist Insurance (UMBI): This covers expenses if you or a passenger is injured in an accident with an uninsured driver. It covers medical expenses (up to the policy limits), and some UMBIs also cover lost wages if your injuries prevent you from working for a period of time.
- Property Damage by Uninsured Motorists (UMPD): Covers damage caused to your vehicle by an uninsured driver. If you are a victim of a hit-and-run, this coverage may apply to you. Depending on the state, UMPD coverage may be mandatory, optional, or unavailable. This coverage may or may not have a deductible, and coverage limits vary from state to state. For hit-and-run drivers, some states require a background check to ensure the hit-and-run driver is uninsured for payment of a UMPD claim. Check with your insurance agent to see what vehicle physical damage options are available with your insurance company and in your state.
What is Underinsured Motorist Coverage?
Uninsured motorist coverage and underinsured motorist coverage are often lumped together, but they refer to two different types of coverage. Uninsured motorist coverage applies when you’re involved in an accident with an at-fault driver who doesn’t have valid auto insurance. Underinsured motorist coverage, on the other hand, applies when a driver who has auto insurance hits you but whose coverage limits aren’t enough to pay for your damages.
When does uninsured motorist coverage apply?
Uninsured Motorist Injury Coverage applies if an uninsured or underinsured motorist is negligent and causes injuries to you or your passengers. With significant increases in auto insurance rates expected this year in the United States, more drivers may choose to drive without auto insurance. Here are some situations in which uninsured motorist injury coverage may help pay for medical expenses, lost wages, pain and suffering, and funeral expenses.
- If you and your passengers are injured in a collision caused by an uninsured driver
- If you are a pedestrian and are the victim of a hit-and-run accident
- If your child is injured in a collision with an uninsured driver while riding in someone else’s car
- The at-fault driver’s insurance company denies the claim
- The at-fault driver’s insurance does not have enough bodily injury coverage to cover the medical expenses incurred by you and your passengers.
Do I need uninsured motorist coverage?
While uninsured motorist bodily injury coverage is not a required auto insurance coverage in all states, it is required in many states and can be very beneficial financial protection. This coverage can protect you from costly damages caused by uninsured motorists, and in some states and jurisdictions, it also provides coverage in the event of a hit-and-run. If you live in a state where uninsured motorist coverage is required, you need uninsured motorist coverage in order to drive legally. Whether it’s required or not, adding uninsured motorist coverage to your auto insurance can provide valuable financial protection if you are involved in an accident caused by an uninsured motorist.
According to the Insurance Research Council (IRC), the rate of uninsured motorists in the United States will rise to 14 percent in 2022, with delinquency rates exceeding 25 percent in some states. Knowing that you’re at increased risk of being in an accident with an uninsured motorist may sway your decision if you live in a state where UM coverage is optional. The truth about uninsured motorist coverage is that you’re playing a game of chance if you choose not to get it. Depending on your driving history and the specific insurance company, it can cost just $5 to $25 per month to add UM coverage to your policy.
How do I know if I have uninsured motorist coverage?
The easiest way to find out if you have uninsured motorist coverage is to check your current auto insurance declaration page. This document outlines your coverage and policy limits, as well as your deductibles. Keep in mind that auto insurance requirements vary depending on where you live. Many states require uninsured motorist coverage, but not all states require or offer uninsured motorist property damage coverage.
You can also check your coverage through the company’s website or mobile app, or by contacting your insurance agent.
