3 Things You Need To Understand About Uninsured Motorist Coverage

Posted on: 9 March 2021

One of the many add-ons you can apply to your auto insurance policy is uninsured motorist coverage (UMC). UMC is required in a few states but not most states. It is essential to understand what this coverage offers.

#1: Uninsured & Underinsured Coverage Are Different

Although the terms are often used interchangeably, uninsured and underinsured driver coverage are two different things.

Uninsured driver coverage comes into effect when you are involved in a crash with someone who either doesn't have insurance at all or whose insurance doesn't meet the requirements for insurance in your state. It will cover medical and property damage, even if the other driver is at fault.

Underinsured coverage is when a driver has insurance, but their policy limit is so low it doesn't cover all their expenses. For example, if you were involved in a crash that resulted in medical bills of around $30,000, and the other driver's insurance only covers $10,000, you would be left with $20,000 of uncovered medical bills you will have to pay yourself. With underinsured coverage add-on to your policy, you can file a claim, and your insurance will cover the remaining $20,000 of medical bills instead of forcing you to pay out of pocket.

#2: Uninsured Motorist Coverage Has Two Parts

With uninsured driver coverage, there are two different parts of categories of coverage you are provided with. The two categories are bodily injury (UMBI) and property damage (UMPD).

UMBI is made to pay for your medical bills if you get into a crash with someone who isn't currently carrying insurance. This portion of your own insurance will provide you with money from wages you missed out on by not being able to work like normal while recovering from your injuries. If you are killed in an accident, this coverage will pay for funeral expenses.

UMPD is designed to pay for damage to the vehicle. So, if the driver without insurance is responsible for damaging your car, you will not have to sit there with a damaged vehicle; you will get the funds you need to fix it.

Together, UMBI and UMPD work to cover your expenses and bills if you were to get into a mishap with someone who doesn't have insurance.

#3: Not Required But Smart

Finally, although you are not required to carry uninsured or underinsured motorist coverage, it is a smart move. You can't control if the driver you get into a crash with has insurance. How important it is for you to have UMC depends on where you live. Nationally, around 13% of drivers are uninsured. However, the exact percentage varies by state, with some states, like Maine, only having about 4.5% of drivers who don't carry insurance, or Michigan, where 20.3% of drivers are don't carry insurance. If you live in an area where around 1 in 5 drivers don't have insurance, it is smart to add this to your policy.

UMC is optional in many states. Still, it is a smart add-on to your car insurance policy as it can allow you access to the money you need to take care of your needs in the event of a crash someone who doesn't have insurance.

Contact a local insurance provider to learn more about auto insurance.