Having valid auto insurance is a legal requirement for driving in 49 states, but that doesn’t mean every driver is insured. If you have an accident with a driver who is uninsured or underinsured, uninsured motorist coverage helps you pay for the damage.
Although the idea behind uninsured motorist coverage is quite simple – insurance coverage that pays when the at-fault driver is unable to do so – this type of coverage can take many different forms:
- Uninsured Motorist (UM) insurance: This type of coverage pays medical bills for you and the passengers in your car if you are in an accident where the driver at fault does not have liability insurance. It also covers lost wages if the accident requires recovery time away from work and kicks in if you are a pedestrian hit by an uninsured driver or in a hit-and-run. UM, insurance is also known as Uninsured Motorist Bodily Injury Insurance (UMBI). One caveat: UM coverage does not cover property damage.
- Uninsured Motorist Property Damage Coverage (UMPD): This type of insurance covers the cost of repair or replacement if your car is hit by an uninsured driver. It can also pay for repairs to your home or other property (like a fence) that is hit and damaged by an uninsured motorist.
- Underinsured Motorist Protection (UIM): This coverage kicks in when an at-fault driver purchases liability insurance, but not enough to pay for the full damage.
What does uninsured mean?
Insurers offer several coverage options to protect against uninsured motorists in part because “uninsured” can have multiple meanings. The typical uninsured motorist is a driver who has no coverage. Although insurance is required in 49 states, about one in eight drivers do not have auto insurance, according to the Insurance Information Institute – and in some states, it reaches as many as one people on five drivers.
However, you may need this type of coverage even if the other driver has some coverage. Someone who carries the legally required liability insurance, but whose coverage levels are too low to pay for the damages they caused, is known as an underinsured driver.
Finally, the offending driver may not stay long enough after an accident to be identified. These types of hit-and-run situations may involve an insured driver, but if you fail to identify him, there is no way to have him or his insurance company pay for your damages. In this case, your UM coverage would cover your costs.
How Uninsured Motorist Coverage Works
Under normal circumstances, if you are in an accident where the other driver is at fault, you file a claim with the at-fault driver’s insurance company to pay for repairs to your car and any medical bills or lost wages incurred following the accident. But if the driver at fault has no insurance, has insufficient insurance, or leaves the scene of the accident, how do you pay for the damage they caused?
Although you can sue the driver at fault for damages that their insurance would normally cover, you are unlikely to pay. Someone with no or insufficient insurance probably doesn’t have the assets to cover the costs. It’s also a non-starter if you’re in a hit-and-run accident because you can’t chase an unidentified driver. Instead, you file a UM claim with your insurer.
If you need to file a claim for uninsured or underinsured auto insurance, you’ll need to do so within a timeframe that can be as short as 30 days. Determining your need and filing a claim quickly can be somewhat complicated in the case of an underinsured motorist, as you may not immediately know the extent of your injuries or damages.
Most insurance companies will not allow you to purchase higher uninsured/underinsured motorist coverage than your own. Liability coverage.
What is the average deductible for uninsured motorist coverage?
Each insurer has its deductible levels for uninsured motorist coverage, and states may have specific rules governing deductibles for this type of coverage. For example, in New Jersey, all uninsured and underinsured motorist property damage claims require a $500 deductible, while South Carolina claims typically have a $200 deductible.
Raising your deductible can help lower your UM and UIM premium costs by increasing your deductible, although these policies are usually inexpensive to start with.
What does uninsured motorist insurance cover?
Uninsured and/or underinsured motorist coverage can help pay for costs when:
- You are in an accident where the driver at fault has no insurance.
- You are in an accident where the driver at fault has insufficient insurance.
- You are hit in a hit-and-run.
- You are in an accident with the driver of a stolen car. Even if the car itself was insured, it is considered uninsured if the driver did not have permission to use the car at the time of the accident.
This type of coverage can cover medical expenses, lost wages, pain, and suffering, and possibly damage to your car, if applicable in your state.
Do I need uninsured motorist coverage?
Coverage for uninsured and/or underinsured motorists is a legal requirement for drivers in 20 states, though it may be a good idea for drivers around the world.
Coverage tends to be relatively inexpensive, although it can cost more in states with higher percentages of uninsured drivers. For example, Mississippi had the highest estimated percentage of uninsured drivers in the nation (29.4%) in 2019, and it is likely that UM coverage, which is not legally required there, will be more expensive. than in other states with lower percentages of uninsured motorists.
Drivers in states with a high number of uninsured motorists may need this coverage more than those in states with more insured drivers because the likelihood of having an accident with an uninsured motorist is higher when the wheel is gone.
Plus, paying for this coverage can give you peace of mind that you won’t be forced to suffer major financial damages after an accident with an uninsured driver.
What to expect from an uninsured motorist claim
When you file an uninsured motorist claim, your insurance company “steps into the shoes” of the uninsured or underinsured driver – and it will only pay the claim if the uninsured driver is at fault in the accident.
Depending on your state’s comparative negligence laws, which assign the degree of fault to each person involved in an accident, your degree of fault in an accident with an uninsured driver may affect the payment of any claim you may receive.
For example, if you live in New Jersey, you can only collect damages from your uninsured or underinsured motorist coverage if your degree of fault does not permit it. exceed that of the other driver or drivers involved in the accident, and your insurer may reduce the compensation payment your award by the percentage of you.
Key points to remember
- About one in eight drivers don’t have car insurance, and having an accident with such a driver could leave you with the obligation to pay for your damages.
- Uninsured and/or underinsured motorist coverage is required in 20 states and can help pay for damages caused by an accident with an uninsured driver at fault or a hit-and-run.
- This type of coverage is generally inexpensive and will cover medical expenses, lost wages, and pain and suffering. In some states, it may also cover damage to your car.
- When you file an uninsured motorist claim, your settlement may be reduced if you are assigned any degree of fault for the accident.