Add-on Insurance Part III: Uninsured and Underinsured Motorist Insurance

It’s an unfortunate fact that there are many uninsured motorists on the road. Not only are uninsured drivers putting themselves at risk of getting caught breaking the law, if they are involved in an accident, they often do not have the means to pay for the damages they have caused. Their delinquency may cause problems for the insured driver, especially if it’s a really bad accident. Not only do uninsured drivers face stiff fines but they may also face jail time.

Most people understand the consequences of being uninsured but don’t understand that they are still prone to financial setbacks and worse because they are underinsured. What that means is that the driver doesn’t

have adequate coverage on their insurance policy and are faced with a situation where they have to pay for the damages out of pocket because they caused the accident. “It’ll never happen to me,” many say.

Often, underinsured motorists don’t have the means to pay a settlement. So, what’s a person to do? To protect yourself from the hassle of dealing with an uninsured or underinsured driver, you should consider buying an add-on insurance that is made specifically for the sorts of scenarios mentioned above. It’s always best to go to a trusted and knowledgeable Insurance Specialist (888.772.4247) who will find you fair rates. You also always want to have more than the minimum liability limits on your insurance policy so that you are not the underinsured party in an accident.

Is Uninsured and Underinsured Motorist (UM) Insurance Required?

In some states, UM Insurance is required and other states are considering adopting it too. Most states allow you to waive the coverage by signing a form explaining the coverage and what you are giving up. The more uninsured drivers there are, the more it costs all people to buy insurance. Some states have added Uninsured/Underinsured Motorist Insurance as a requirement to help with these heavy costs. Check with a local DMV or a a trusted Insurance Specialist (888.772.4247) if you’re unsure about your state’s insurance requirements.

If you elect to buy this very important type of insurance, you can set your own coverage limits. An Insurance Specialist can easily go over these numbers with you, if you’re unsure (888.772.4247), but we try to break it down for you in simple terms here:

Split limits. Most Uninsured Motorist coverage has split limits, which just means that there is a per-person coverage limit and a per-accident coverage limit. If you buy UM with $20,000/$40,000, you are covered up to $20,000 in the accident if you are injured or if you die. If there are two or more people injured or killed in the accident, the total amount of coverage is $40,000.

Combined limits. This is another option when you buy UM. In a combined single limit policy, there’s only one amount that your carrier will pay for bodily injury per accident. If your limit is $30,000, then that is the amount you’re covered up to regardless of the number of passengers injured or killed in the accident. If your hospital bills cost $30,000, you’re covered 100%. If there are three people in the car and the total bill comes out to $50,000, you’re on your own for the remaining $20,000. Suing the other party may end up doing little good if they have no savings or assets, which is often the case.

How Many Uninsured Drivers Are Driving Today?

There are many, and most of them end up regretting not buying insurance in the end. According to the Insurance Research Council (IRC), 1 out 7 drivers is uninsured. That’s a lot of uncovered traffic accidents.

What about Bodily Injury?

With Uninsured Motorist Insurance (UM), you and everyone in your vehicle will be covered for medical expenses, lost wages and pain and suffering. You will also be covered in the case of a hit-and-run. However, this coverage only applies when the other driver is partially or fully at fault for the accident and has no insurance or not enough to cover expenses. This is the type of Uninsured/Underinsured Motorist (UM) Insurance that is required in some states.

What about Property Damage?

There is Uninsured Motorist Property Damage Coverage (UMPD) as well. It’s rarely required and doesn’t even exist in some states. This is not because it’s not a valuable type of coverage, however. In fact, when it is available, it’s a wise one to purchase. One accident can leave you with exorbitant bills you never anticipated. In order for you to be covered, the other driver must be at least partially at fault in the accident and, again, have no or too little insurance to cover losses. Typically, this coverage has a set limit for your vehicle repairs if you don’t have comprehensive and collision coverage, or it will waive your deductible if you do.

In short, you don’t want to be on either end of an accident that involves an uninsured or underinsured driver. Protect yourself by having adequate amounts of coverage on your vehicle(s) and also buy coverage so that you don’t end up paying a pretty penny if the other driver causes an accident and doesn’t have enough or any insurance.

Also, consider buying Comprehensive Insurance and Collision Insurance. Speak with a trusted Insurance Specialist if you’re unsure which coverages you’ll need: (999) 772-4247.


The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.

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