How Your Insurance Handles Uninsured and Underinsured Motorists

Uninsured UnderinsuredWhen you’re shopping for car insurance, you naturally want to do it as economically as possible. You may think that skipping coverage for uninsured and underinsured motorists might be a great way to save some money while still getting the insurance that the law requires.

There’s just one thing to remember. Not every driver in this country will carry adequate auto insurance. In fact, according to the Insurance Information Institute, an average of one out of every eight motorists you pass on the road might carry no car insurance whatsoever. Unless you have adequately protected your interests by obtaining adequate coverage of your own, an unintended encounter with one of these people could wind up costing you dearly.

Whether you are able to obtain such coverage is another matter. While many states mandate it, some fail to offer it entirely. In addition, every state that does make it available will have its own set of rules for handling it.

Different Types of Uninsured and Underinsured Motorist Coverage

The two standard varieties of UM/UIM (uninsured motorists/underinsured motorists) coverage concern property damage liability and bodily injury liability. Within each of the two categories, you are likely to have separate coverages for uninsured and underinsured motorists, but all have one thing in common: They assist in paying for damages you may suffer due to a collision with a motorist who lacks sufficient insurance or fails to carry any at all. 

UM/UIM Coverage in No-Fault States

If you live in a no-fault state, it shouldn’t matter whether you or the other fellow caused the accident. You simply file a claim with your own insurance company, and it will pay the damages. However, this does not mean that drivers in a no-fault state should skip UM/UIM protection entirely. Health insurance doesn’t cover everything, and it won’t compensate you for things like lost wages or pain and suffering.

UM/UIM Coverage in Tort States

In a tort state, anyone involved in a crash with an uninsured driver will often have no alternative but to sue for damages. Unfortunately, this will rarely succeed to anyone’s liking. Even if the courts should decide in your favor, the uninsured motorist will more than likely lack the funds required to pay the damages you deserve. Worse, your own insurance will cover you only up to your preselected limits.

In addition, depending on your state of residence, your insurer could choose to compensate you only for the percentage at which you were not at fault. For example, if your own behavior was 25 percent responsible for the accident, you might receive only 75 percent of the monies that would otherwise have come to you.

Determining the Optimal Amount of Uninsured/Underinsured Motorist Coverage

The limits for uninsured/underinsured motorists coverage can run from as low as $15,000 to as high as $1 million, with all manner of steps in between. A number of states have preset minimum coverage amounts, but nothing is stopping you from choosing higher limits if you wish. In selecting the coverage that suits you best, a number of points can factor into your decision. They include:

  • The amount and type of your medical insurance.
  • Whether your employer offers short- or long-term disability coverage.

You will also need to choose between stacked and unstacked coverage. If you own just one car, unstacked is your only option, and it is one in which your coverage will equal the level listed on your policy. However, if you drive more than one vehicle and reside in a state that permits, it, you can stack or increase your coverage in accordance with the number of cars involved.

Why Uninsured/Underinsured Motorist Coverage Matters

Given the surprising number of uninsured and underinsured motorists on the road today, skipping the purchase of UM/UIM coverage could end up costing you dearly. Regardless of how careful you are behind the wheel, there is always the chance that you’ll suffer harm at the hands of a driver who either lacks sufficient insurance or carries none at all. If this should happen to you, having the proper coverage of your own could mean the difference between solvency and financial ruin.

Don’t get caught short. Call All Kinds of Insurance at 702-534-4697 and get your auto insurance quote today.