Uninsured Motorist Coverage & Underinsured Motorist Coverage: How your Auto Insurance can Protect you Against Uninsured Drivers.

Suppose someone totals your car in a rear end accident and you have fairly serious injuries that keep you in the hospital and from doing your job for a month or more.  Who’s going to foot the bill?  That’s what insurance is for, right?  Well, suppose the driver that hit you doesn’t have any, or has only the minimum amount of liability insurance mandated by law?  Most people without auto insurance are comfortable with taking the risk of never being in an accident. This is false confidence, or, to put it bluntly: it is selfish and foolish. Surely you’ve heard the old saying: "If you can't afford the insurance, don't buy the car!" (Or was that “Don’t do the crime, if you can’t do the time”?)  Well, you get the idea.

And even for those who may have the good judgment, forethought and sense of responsibility to purchase auto insurance, the next question is: Do you have enough coverage? Along with the cost of buying a new car, the cost to repair or replace an automobile has increased substantially.  And you’ve certainly heard about the soaring cost of medical care in the U.S.  It is imperative to make sure you have enough coverage.  Don’t be fooled by the term, "full coverage".  It is not a type of coverage. Full coverage can mean you have a little bit of coverage for all of the risks—not necessary enough and any one coverage.

There are two types of insurance that everyone should carry on their own auto policy in a sufficient amount to protect themselves.  One is called uninsured motorist coverage, and its partner is called underinsured motorist coverage.

Uninsured Motorist Coverage
Uninsured motorist coverage (UM) is provided by your own policy.  It pays for your damages when you are in an accident and the at-fault driver has no insurance at all.  It takes the place of the insurance the at-fault driver should have had and will cover your medical bills, lost wages, pain and suffering and related expenses. In some states it will also cover your property damage.

UM coverage is sold the same way liability coverage is sold.  You’ll see the limits written as 15/30, 25/50, 50/100, 100/300, etc.  The two numbers represent how many thousands of dollars coverage you have.  The first number is what the limits will be if one person is injured in an accident with an uninsured motorist.  The second number is what the limits will be if more than one person is injured.  For example, if you and your passenger are injured in a collision with an uninsured, at-fault driver, and your limits are 25/50, you will have $50,000 available to cover the damages for the two of you combined.  Naturally, the higher the limits, the more coverage you have, but the higher your premium will be.

When you make a UM claim with your insurance company, it is handled the same way as if the insurance company for the other driver was handling it.  That is, it puts you and your own insurer in somewhat of an adversarial relationship.  You are trying to get money from them and they don’t want to give you a lot of it.  Not to worry.  They must treat you fairly and they must negotiate a settlement with you in good faith.  Just provide them with the documentation they ask for, and it should go smoothly.

Underinsured Motorist Coverage
Underinsured Motorist coverage (UIM) is similar, but a bit different.  It comes into play when the at-fault driver has insurance, but it is not enough to cover your injury-related expenses.  Suppose, for example, your car is wrecked in an intersection accident where the other driver went through a stop sign.  You have a dislocated shoulder, soft tissue injuries to your back and many cuts and bruises to your body.  Your medical bills come to $22K.  You also lost three weeks’ wages, totaling $4500.  The at-fault driver only carries liability limits that meet the minimum state requirements of 15/30, meaning $15K for one person’s injuries, $30K for all injuries.  His $15K limits will not cover your loss.  This is where your UIM kicks in, to cover the balance of your medical bills, your lost wages, and your non-economic damages, including pain and suffering.  As with UM coverage, you make a claim against your own insurance company and you will reach a settlement with them.

Some insurance companies offer UM and UIM coverage routinely, and with others you have to ask for it separately.  Talk to your agent and be sure to put it in place before you venture out on the road.  There are way too many uninsured and underinsured drivers lurking out there and you want to protect yourself just in case.