In Parts One and Two of this series, we focused on liability coverages which cover you if you cause injuries to others or damage to their property. Part One highlighted Bodily Injury liability and Part Two explained Property Damage liability. This week we are going to discuss Uninsured and Underinsured Motorist coverage. These coverages protect you and your passengers if the at-fault person in an accident injures you (or your passengers) and does not have insurance (or enough insurance) to cover your injury claim and associated expenses.
While your personal health insurance may cover the medical bills for your injuries, that insurance will not cover:
Your lost income if you can’t work
Increased expenses for extra support you may need around the house
Resulting disabilities from your injuries
Compensation for pain and suffering
If the person that injured you had insurance, their insurance would pay the expenses above… but what happens if they don’t have insurance or enough to cover everything above?
If they don’t have insurance, your Uninsured Motorist (UM) coverage will step in and pay you for the items listed above (up to your policy limit). If they had insurance, but not enough to cover what they owe you, your Underinsured Motorist (UIM) may step in and pay some or all the difference. The amount depends on how much Underinsured Motorist (UIM) you have and how much Bodily Injury liability the at-fault person had.
Your Underinsured Motorist (UIM) only pays the difference between your UIM limit and the Liability limit of the person that injured you. Therefore, insuring for reduced UIM limits can impact your ability to collect on such a claim. For example, if you have $100,000 UIM coverage and are injured by someone who carries $25,000 Liability coverage, your UIM will only pay up to another $75,000 ($100,000 – $25,000) for injuries caused by the other person.
Similar to your Bodily Injury coverage, Uninsured/Underinsured Motorist coverage is listed on your auto policy and will look like the sample below.
Unsinsured/Underinsured $100,000 per person/$300,000 per accident
The first number ($100,000) is the maximum amount of coverage available per individual injured in your vehicle. The second number ($300,000) is the maximum amount of coverage available for all injured in your vehicle in a single accident.
Uninsured/Underinsured Motorist is protection for you, your family, and your passengers, from people who do not insure themselves properly. We recommend carrying $250,000/$500,000 UM/UIM limits on your policy. Insuring to this level will not raise your premium much. We offer complimentary reviews and are willing to answer any questions you have about your coverage.