When shopping for car insurance, most people think that uninsured/underinsured motorist is a coverage that everyone should carry. And in most cases, they’re probably right.
What’s interesting, however, is when you ask the average car owner if they carry this coverage, they immediately reach for their car insurance ID card and discover it’s not listed and then immediately start to get nervous.
There’s really no reason to panic because most states do not require car owners to carry UM/UIM and typically the only coverages that are listed on your ID card are the mandatory coverages.
If you ask car owners what UM/UIM covers, maybe three will actually know. Most will say something like “it covers me if the other guy doesn’t have insurance or if it’s a hit and run.” Instead of making false assumptions about it, let’s answer the question accurately. What does uninsured/underinsured motorist cover or not cover?
About Uninsured/Underinsured Motorist Coverage
Uninsured/underinsured (UM/UIM) motorist coverage was originally designed to protect persons in a vehicle that was struck by another vehicle (at-fault) and either that driver did not have liability insurance or they did have it but the limits were not sufficient to cover the medical expenses of the injured party or parties.
After a while, the auto insurance carriers developed UM/UIM PD (property damage) to cover the car owner’s vehicle as well as the injuries to the (not-at-fault) driver and passengers. This means, in the states where allowed, you can easily protect yourself and your vehicle if you are hit by an uninsured or underinsured driver.
For this article, we will drill down into uninsured/underinsured bodily injury coverage only and we’ll post a follow-up article about uninsured/underinsured coverage property damage coverage.
Who is considered an Uninsured/Underinsured Driver?
Any driver in an accident, who is determined at-fault and is liable for the cost of injuries after an accident, is considered uninsured or underinsured under the following circumstances:
- The at-fault driver has no liability insurance at the time of the accident
- Has liability insurance that doesn’t meet the state’s minimum requirements
- Has liability insurance but the at-fault driver’s company refuses to pay the claim
- A driver who cannot be identified (hit and run)
Example of an Uninsured Motorist Claim
Example of an Underinsured Motorist Claim
Is UM/UIM necessary if I have Health Insurance?
If you are struck by a vehicle that uninsured or underinsured, most health insurance plans would pay for your medical expenses, subject to your deductible and coinsurance. There are no deductibles or coinsurance requirements with UM/UIM and your company will pay from the first dollar subject to the limits you carry.
Additionally, your health insurance will not pay for lost wages or pain and suffering while your UM/UIM will pay.
Lastly, if you are in a not-at-fault car accident and want to hire a personal injury attorney, it can be very difficult if you are not carrying uninsured/underinsured motorist coverage because they typically get a percentage of the award they get for you.