Picture the cars you passed on the way to work this morning. Now consider this: for every eight cars you passed or that were heading the other way, one of those vehicles had, on average, someone driving without insurance.
According to the Insurance Research Council 13 percent of drivers are uninsured. If you live in Florida, for example, this rate goes up to 26 percent.
Collectively, Americans are driving more. Meanwhile, the percentage of uninsured drivers is creeping up. This means the possibility of being hit by an uninsured motorist is very real.
Being in an accident is stressful enough. But getting hit by an uninsured driver has the potential to make things even more complicated.
States generally require drivers to carry a minimum level of liability insurance. This insurance means that if another driver hits you, they have insurance to cover your damages: your medical payments, car repair bills and so on. Depending on what types of car insurance you have, if a driver doesn’t have this insurance, you might have to take the other driver to court to get compensation.
That’s where uninsured motorist coverage comes in. So how does it work?
Uninsured motorist coverage
Uninsured motorist coverage means your insurer will cover certain costs when you’re in an accident and the at-fault driver is doesn’t carry liability insurance.
It breaks down into two forms: uninsured motorist property damage (UMPD) and uninsured motorist bodily injury coverage (UMBI).
Uninsured motorist property damage (UMPD)
Uninsured motorist property damage coverage pays for damage if your car is hit by a driver without insurance and, in some states, if you are the victim of a hit-and-run. However, in certain states UMPD coverage will only pay for damage if the hit-and-run driver can be identified.
It is mandatory in the following states:
- Maryland
- New Hampshire
- North Carolina
- South Carolina
- Vermont
- Virginia
- Washington, D.C.
- West Virginia
In other states UMPD is offered, but buying coverage is not mandatory. These states are:
- Alaska
- Arkansas
- California
- Colorado
- Delaware
- Georgia
- Indiana
- Illinois
- Louisiana
- Mississippi
- Ohio
- Rhode Island
- Tennessee
- Texas
- Washington
Do I need uninsured motorist property damage?
If you live in a state where it is a requirement, the answer is obvious. In other states, the answer depends on what other coverage you already have.
If you have collision insurance, you do not need uninsured motorist property damage. This is because they cover the same thing. If you are hit by an uninsured motorist and you already have collision insurance, that would cover you. If you have collision coverage, however, you will have to pay the deductible on the claim, unless you also have a collision deductible waiver on your policy. Usually, the deductible on UMPD is lower than the one for collision coverage.
If you have an older vehicle that is lower value, having collision coverage doesn’t really make sense.
Because premiums tend to be lower, buying UMPD coverage makes sense when you have an older vehicle that you don’t want to carry comprehensive and collision on.
Uninsured motorist bodily injury (UMBI)
Uninsured motorist bodily injury coverage takes care of your medical expenses if your injury is caused by an uninsured motorist.
UMBI is a requirement just under half of states. They are:
- Connecticut
- Illinois
- Kansas
- Maine
- Maryland
- Massachusetts
- Minnesota
- Minnesota
- Nebraska
- New Hampshire
- New Jersey
- New York
- North Carolina
- North Dakota
- Oregon
- Rhode Island
- South Carolina
- South Dakota
- Vermont
- Virginia
- Washington D.C.
- West Virginia
- Wisconsin
Do I need uninsured motorist bodily injury coverage (UMBI)?
Whether you need UMBI or not depends on a few different scenarios:
Obviously, if you live in a state where it is mandatory then, yes, you need it.
Things change if you live a in a no-fault state where UMBI is not mandatory. A no-fault state means drivers make claims from their own insurance company rather than that of the at fault driver.
In these states you would be required to carry personal injury protection (PIP) insurance to handle your own medical costs if hit by an uninsured driver. However even with PIP there may be further costs you incur that mean uninsured motorist insurance is still worth considering.
Finally, if you do not live in a no-fault state the situation changes again. In these states, your medical bills would be covered by the at-fault driver’s liability insurance. If they don’t have any insurance, you or your insurer might have to go to court to compensated.
That can take time, or it could be that the at-fault driver doesn’t have assets for it to be worth taking them to court.
It is in this situation that uninsured motorist coverage would enable you to claim the costs from your insurance company.
Uninsured motorist coverage and health insurance
If you have health insurance, this could cover your medical expenses if you were hit by an uninsured driver, depending on your policy.
Even if you have health coverage, uninsured motorist bodily injury could potentially help cover things like lost earnings that would not be covered by your health policy.
Stacked vs. unstacked insurance
In certain states, if you have multiple vehicles you may also have the option of stacking your uninsured motorist coverage. Essentially, this enables you to combine the coverage limits on each vehicle so that you can claim a higher overall amount in the event you are hit by an uninsured motorist.
Underinsured motorist coverage
Underinsured motorist coverage works on similar principles to uninsured motorist coverage. It is designed to cover any shortfall from an at-fault driver’s insurance. This shortfall could be because that driver has no insurance, but it could also be because that driver does not have enough insurance.
For example underinsured motorist bodily injury coverage applies if you’re hit by a driver who has some insurance but their liability limits are too low to cover the damage or medical expenses.
With car insurance in California, the minimum required medical liability coverage is $15,000. If you were in an accident and your medical expenses were $25,000 but the at fault driver only had the state minimum $5,000 – their liability insurance would only cover that amount.
If you have UIM coverage on your insurance policy this would cover the difference.
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