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February 23, 2017

Uncertain about uninsured/underinsured motorists coverage?

UM/UIM coverage provides protection if you, your family, or passengers in your car are injured by a driver who is uninsured or does not have enough insurance.

Tamara M. Stephens

In no uncertain terms, uninsured motorist/underinsured motorists (UM/UIM) liability coverage is an important means of protecting yourself and your family against risks on the road. 

Although auto liability insurance is required in most states, many drivers choose not to comply. In fact, nearly 13% of all motorists, or about one in eight drivers, are uninsured.1 (In some states, the number is as high as 25% or even greater!) 

What is UM/UIM coverage?

UM/UIM coverage provides protection if you, your family, or passengers in your car are injured by a driver who is uninsured or does not have enough insurance. This coverage also protects you if you are struck by a car as a pedestrian or involved in a hit-and-run accident. 

If you are involved in an accident where an uninsured or underinsured driver is at fault, unless you have UM/UIM coverage in place, you may end up without financial recourse for your damages. You could possibly pursue compensation through litigation, but unfortunately, it is often challenging to recoup a settlement if the other driver doesn’t have auto insurance. 

The underinsured motorists component of an auto policy comes into play when another driver causes an accident, but their insurance limits are not enough. Perhaps the other driver has purchased only the minimum liability requirements, which in some states are as low as $15,000. In the case of an accident involving serious injuries, that amount would not go very far. 

Uninsured motorists property damage

In a number of states, insurance regulations pertaining to uninsured motorists includes both bodily injury and property damage. However, the dollar amount of coverage is limited and this should not be a substitute for collision coverage for your vehicle. 

An inexpensive ounce of protection

Requirements for UM/UIM coverage vary by state – some require specific amounts, in other states this coverage is optional. Whether or not it’s mandatory in your state, UM/UIM coverage is an inexpensive way to help protect you and your family against potentially significant out-of-pocket expenses as a result of injuries caused by another driver. 

You purchase auto insurance not only because it is required by law, but also to protect your assets if you cause injuries to someone else. Why not provide yourself with the same protection in case someone causes injuries to you or your family? UM/UIM coverage can be added to your auto policy but don’t stop there. For a relatively low premium you may also be able to obtain additional excess UM/UIM limits on an umbrella or excess liability policy if you have coverage through a specialized carrier. If your current insurance provider can’t offer you this coverage, contact a personal insurance advisor who works with carriers that can provide you with higher limits of protection. 

For more information, please request an auto quote.

1 Insurance Research Council, NAIC