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What Is Uninsured Motorist Coverage and Is It Required?

What is GAP Insurance on a Car? It’s Something You Might Need

If you look at the types of car insurance coverage required by law, you’ll see most states mandate that drivers carry a minimum level of bodily injury liability coverage. In the event of an at-fault accident, bodily injury liability coverage pays for any damage you may have caused that you are legally responsible for. Medical bills can add up quickly, which is why it’s important to have enough liability coverage.

But the unfortunate reality is that not all drivers are as responsible as you. It’s impossible to know who has enough liability coverage to protect you in the event they cause an accident — or whether they even have insurance at all. So what happens if someone harms you or your vehicle and they don’t have insurance?

Luckily, there’s a type of car insurance coverage meant to protect you in this scenario. It’s called uninsured motorist coverage. If you haven’t heard of this type of coverage, or you have but you don’t know what it covers, that’s OK.

This article will explain what uninsured motorist coverage is and how it works. Then, we’ll help you determine if uninsured motorist coverage is something you need.

In this article

  • What is uninsured motorist coverage?
  • How does uninsured motorist coverage work?
  • Who needs uninsured motorist coverage?
  • Do I need uninsured motorist coverage if I have full coverage?
  • Bottom line

What is uninsured motorist coverage?

Depending on the state, uninsured motorist insurance may be broken down into three separate types of protection, or it may include all three:

  • Uninsured motorist coverage
  • Uninsured motorist property damage coverage
  • Underinsured motorist coverage

Uninsured motorist coverage

Uninsured motorist coverage is a type of car insurance that reimburses you, a family member, or a designated driver if one of you is hit by an uninsured driver who can’t pay for your medical expenses or lost wages. This coverage also offers protection in the event you or another covered driver is the victim of a hit-and-run accident. If you, as a pedestrian, happen to be struck by an uninsured driver, this coverage will also provide reimbursement.

Uninsured motorist coverage is also known as uninsured motorist bodily injury (UMBI) insurance. It’s optional in some states, but mandatory in others. According to the Insurance Information Institute, UM is mandatory in 20 states and the District of Columbia.

Uninsured motorist property damage coverage

Whereas UM reimburses for injuries caused by an uninsured motorist, uninsured motorist property damage coverage reimburses you for damage an uninsured driver causes to your vehicle. UMPD may also protect your car if a hit-and-run driver damages it, and the coverage is generally extended to cover damage to other personal property, such as your house or fence.

UMPD is not offered in every state. If your policy doesn’t include UMPD, then you would have to pay to have your car repaired or file a claim against the other driver in civil court. You can ask your insurance agent or your state insurance department whether UMPD is available where you live.

Underinsured motorist coverage

In instances where an at-fault driver does have liability insurance but not enough insurance to cover the total extent of your injuries, underinsured motorist coverage steps in. In this case, the underinsured driver’s insurance would pay for all damages up to their policy limits. Then, your UIM coverage would cover the excess amount up to the limit you selected for your UIM.

UIM generally protects you if you’re struck by a hit-and-run driver or if you’re struck by a car as a pedestrian. In some states, UIM is part of UM.

How does uninsured motorist coverage work?

Normally, if you’re injured in an accident caused by an insured motorist, the cost of your medical expenses, lost wages, and pain and suffering would be paid for by the other driver’s liability insurance, up to the liability limits they paid for in their insurance policy. In the case of being injured by an uninsured motorist, these liability coverages simply don’t exist.

Uninsured motorist coverage protects you in the event that you’re injured by an uninsured driver. This coverage typically pays for medical bills, lost wages, and pain and suffering for you and your passengers.

If you don’t have uninsured motorist insurance that steps up to replace the at-fault driver’s missing liability coverage, you may have no other choice than to take that driver to civil court to sue for your expenses. This can take time and money, and there’s no guarantee you’ll win a settlement. That means you could be forced to pay out of pocket for any injuries or damages done to you. Uninsured motorist coverage can help prevent this from happening.

To give you a better idea of the financial impact, here are two scenarios and how they might play out:

Scenario 1: You don’t have UM coverage

You stop at a red light. The driver behind you isn’t paying attention and slams into the back of your car. You’re OK, but you have a feeling you’re going to be taking a trip to the hospital for neck and back pain. You go to exchange information with the other driver, but they tell you they have no insurance.

You visit the hospital and get treated for your injuries, which results in a $10,000 medical bill. You didn’t have uninsured motorist coverage on your policy, so you’re forced to take the other driver to civil court to sue for your incurred expenses. For whatever reason, you don’t win a settlement. As a result, you’re stuck paying that $10,000 hospital bill out of pocket as well as any money you spent on the legal process.

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Scenario 2: You have UM coverage

Using the same example, you again wind up with a $10,000 hospital bill for your injuries after getting rear-ended by an uninsured motorist. However, you decided to add UM coverage with limits of $15,000/$30,000 when you purchased your policy. That first number is the maximum payout per-person, the second is the maximum total payout per accident.

So in this scenario you just submit the $10,000 hospital bill to your insurance provider. You provide photos of the accident scene, the police report, and witness statements. Your insurer approves your claim. Because you have UM coverage with a limit of $15,000/$30,000, your insurer covers the $10,000 medical bill.*

*The exact settlement process might vary from one company to another.

Who needs uninsured motorist coverage?

As I mentioned earlier, 20 states and the District of Columbia have mandatory insurance requirements when it comes to uninsured motorist coverage. Even if your state doesn’t require you to have it, your decision as to whether you should purchase uninsured motorist coverage shouldn’t be taken lightly.

Despite uninsured motorist bodily injury coverage being required in all but two states, a 2017 study by the Insurance Research Council shows that one in eight drivers, or about 13% of motorists across the country, were uninsured in 2015 (the most recent data available). This ranges from a low of 4.5% in Maine to a high of 26.7% in Florida. Yes, you’re reading that correctly. A little more than one in four drivers in Florida was not insured at the time of this study.

Furthermore, according to the National Highway Traffic Safety Administration’s most recent version of its report, “The Economic and Societal Impact Of Motor Vehicle Crashes,” the average claim for damages caused by an uninsured motorist is $7,741. This is no drop in the bucket for most of us and it’s why many drivers need or can at least benefit from UM coverage.

How much uninsured motorist coverage do I need?

When you purchase UM insurance, you choose your coverage limits. These limits determine the maximum amount your insurance provider will pay out toward a covered claim. This might be a split limit or a combined single limit. An example of a split limit would be $15,000/$30,000, where the first number represents the maximum payout per-person and the second represents the maximum total payout per accident.

In states where UM coverage is mandatory, each state sets its own minimum requirements. Here are the states that require UM coverage and the minimum required coverage amounts for each:

State Minimum UM coverage amount by law
Connecticut $25,000/$50,000
District of Columbia $25,000/$50,000
Illinois $25,000/$50,000
Kansas $25,000/$50,000
Maine $50,000/$100,000
Maryland $30,000/$60,000/$15,000*
Minnesota $25,000/$50,000
Missouri $25,000/$50,000
Nebraska $25,000/$50,000
New Hampshire $25,000/$50,000**
New Jersey $15,000/$30,000/$5,000*
New York $25,000/$50,000
North Carolina $30,000/$60,000/$25,000*
North Dakota $25,000/$50,000
Oregon $25,000/$50,000
South Carolina $25,000/$50,000/$25,000*
South Dakota $25,000/$50,000
Vermont $50,000/$100,000
Virginia $25,000/$50,000/$20,000***
West Virginia $25,000/$50,000/$25,000*
Wisconsin $25,000/$50,000

*The third number listed is required uninsured motorist property damage coverage
**Insurance not mandatory in New Hampshire, but if you purchase auto insurance, you must also purchase UM coverage
***The third number listed is required uninsured motorist property damage coverage. You can pay a $500 uninsured motor vehicle fee in lieu of carrying insurance

For the most information regarding your state’s minimum required amounts of car insurance coverage, check with your state insurance department.

Do I need uninsured motorist coverage if I have full coverage?

Although there is actually no policy called full coverage auto insurance, in general, the term full coverage means the combination of liability insurance, collision insurance, and comprehensive insurance. A car insurance policy is made up of several different components that, aside from state-mandated liability coverages, you choose according to how much car insurance you need.

Collision and comprehensive coverages are optional coverages that pay to repair damage to your car. Collision pays out if you damage your car as a result of colliding with another car or object, such as a tree, fence, or light pole. Comprehensive, on the other hand, pays to repair damage to your car from things other than collision. This includes flooding, fire, hail, theft, and vandalism, among other things.

Even if you have liability coverage, as well as collision and comprehensive coverage, you may still need uninsured motorist coverage if your state requires it. If your state doesn’t, it is up to you to decide whether you want to add UM coverage to your auto insurance policy.

Bottom line

There’s no way to know if every other driver on the road has enough insurance coverage to protect you in the event they injure you in an accident. For this reason, it’s potentially a good idea to have uninsured motorist coverage. Depending on your state, you might even be legally required to carry this coverage.

Although you might contemplate forgoing uninsured motorist coverage if you’re wondering how to save money on car insurance, you have to weigh the savings against the risks of not being covered. Car accidents caused by uninsured motorists cost $7,741 on average in medical bills, and you could be stuck paying this if you don’t have the right coverage.

A better option for saving money on car insurance is to shop around. Instead of sacrificing coverage for you and your family, compare car insurance quotes across the different providers to find the car insurance company that offers the best price for what you need. Not all companies charge the same amount for the same coverage. Shopping around can help you find the best car insurance for you.

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