Despite the fact that auto insurance is mandatory in most states, there are still a significant number of drivers on the road who are uninsured. According to the Insurance Information Institute (III), approximately 13% of drivers in the United States were uninsured as of the latest data. This means that in the event of an accident caused by an uninsured driver, you would likely have to bear the costs of your medical bills and property repairs yourself—unless you have uninsured motorist coverage.
Without UM coverage, pursuing compensation from an uninsured driver can be a long and arduous process, often resulting in little to no recovery, particularly if the driver has few assets.
2. Protection Against Drivers with Insufficient Insurance
While most states have minimum insurance requirements, these minimums are often not enough to cover the full costs of an accident, especially if you sustain severe injuries. In many cases, drivers might carry only the minimum required by law, which can be as low as $25,000 for bodily injury coverage in some states. If your medical bills or vehicle repairs exceed that amount, underinsured motorist coverage can help bridge the gap.
In fact, UIM coverage is particularly important in states with high medical costs or in scenarios where accidents result in significant property damage. Having UIM ensures that you won’t be left holding the bag when the at-fault driver’s coverage isn’t enough to cover your expenses.
3. Peace of Mind
Accidents can be stressful enough without having to worry about whether you will be able to recover your medical expenses and lost wages. UM/UIM coverage provides peace of mind by offering a financial safety net in situations where other drivers cannot or will not pay for your damages.
Additionally, in the event that you are involved in an accident with an uninsured or underinsured driver, your insurance provider will handle the claims process, so you don’t have to take legal action or deal with complicated negotiations yourself.
Is Uninsured/Underinsured Motorist Coverage Required?
Whether or not UM/UIM coverage is required depends on your state’s insurance laws. Some states require it to be included in every auto insurance policy, while others make it optional. In states where it’s not mandatory, insurance companies typically offer it as an add-on to your standard policy. Even if it’s optional, purchasing UM/UIM coverage is strongly recommended for the protection it offers.
For example:
- In Florida, Uninsured Motorist Coverage is optional, but you must explicitly reject it in writing if you choose not to purchase it.
- In Michigan, Uninsured Motorist Coverage is required for all drivers, while Underinsured Motorist Coverage is optional.
Regardless of whether it’s required by law in your state, it’s worth considering adding UM/UIM coverage to your policy, as it can provide vital protection in cases where the at-fault driver is either uninsured or inadequately insured.
How Much Uninsured/Underinsured Motorist Coverage Do You Need?
The amount of UM/UIM coverage you need depends on several factors, including the value of your vehicle, your medical expenses, and the amount of liability coverage you carry. It’s generally a good idea to have UM/UIM coverage limits that are at least equal to your liability limits. That way, if you’re injured or your car is damaged by an uninsured or underinsured driver, you won’t have to worry about paying out of pocket for damages that exceed your coverage limits.
Many experts recommend purchasing as much UM/UIM coverage as you can reasonably afford, particularly if you live in an area with a high number of uninsured or underinsured drivers. You should also consider factors like your personal health insurance and whether you have other forms of financial protection, such as health savings accounts or savings for emergencies.
Conclusion
In a world where accidents can happen at any time, Uninsured/Underinsured Motorist Coverage serves as a crucial safety net. It offers financial protection when you are involved in an accident with a driver who doesn’t have insurance or doesn’t have enough insurance to cover your costs. Whether it’s medical expenses, lost wages, or property damage, UM/UIM coverage ensures you’re not left holding the bill if the at-fault driver lacks sufficient coverage.
Given the prevalence of uninsured and underinsured drivers on the road today, it’s wise to consider adding this coverage to your auto insurance policy. While it may increase your premium slightly, the added peace of mind and protection it offers are well worth the investment. Make sure you understand the specifics of UM/UIM coverage and discuss it with your insurance provider to ensure you’re fully protected against unexpected accidents.