Getting in an accident with an uninsured motorist can be very financially draining. Many, if not all, insurance companies offer an add-on to your auto insurance to assist you with such a situation.
Uninsured motorist coverage works to help you cover the cost of damage after getting into an accident with a driver who isn’t carrying any car insurance.
This uninsured motorist coverage applies to you as the car insurance policyholder and any passengers you may have in the car.
This uninsured motorist coverage helps you protect against vehicle damage and any injuries resulting from the accident or hit-and-run. Like liability insurance, some states require uninsured motorist coverage.
Uninsured motorist coverage can provide protection when:
- A driver who had no liability car insurance
- A driver who lacks a sufficient amount of liability insurance, also known as an underinsured motorist
- A driver whose insurance company refuses coverage or goes out of business
Encountering an uninsured or underinsured motorist can be worrying, but buying uninsured motorist coverage or underinsured motorist insurance to protect yourself and your assets will be the best step to ease worries after an accident or hit-and-run.
You should also be aware of how most auto insurance companies express uninsured motorist insurance and underinsured motorist coverage on car policies. If you encounter a plan that says 100/30, that would mean $100,000 bodily injury coverage per person and $300,000 bodily injury coverage per accident.
Suppose you have a plan with this coverage limit, and you and a passenger are injured. In that case, your car insurance will pay the maximum medical expenses of $300,000.
How Does Uninsured Motorist Coverage Work?
Despite car insurance being state-mandated, your chances of encountering an uninsured driver are still high. For this reason and many others, you will want to know how uninsured motorist insurance and underinsured motorist coverage work.
After an accident, you usually contact the other driver’s car insurance company for their liability insurance policy to cover damages to your motor vehicle and injury expenses for your passengers, if any, and yourself.
Suppose the other driver’s vehicle insurance company approves your auto insurance claim. In that case, you will go about repairing your car or paying medical expenses with the payout you receive.
However, when there is no car insurance company to contact as the other driver is an uninsured motorist, you are stuck with an avalanche of bills, scrambling to find a way to pay all the costs yourself.
After the accident, you would file a car insurance claim with your car insurance provider instead of paying the bills yourself. Uninsured driver coverage can come in handy during these situations and ease stress.
The same goes when the other driver is underinsured, and their motor vehicle insurance company will not pay for all the damage caused by the car accident.
What Does Uninsured Motorist Insurance Cover?
Uninsured motorist insurance covers the various consequences following an accident. These generally would be picked up by the other driver’s liability car insurance, but if they lack car insurance, you will typically be on the hook for the costs.
This can get pricey if you have extravagant medical expenses or a car on the brink of being totaled. For these reasons, knowing how an uninsured motorist policy will help you following an accident is best. There may also be some auto insurance coverage limitations that you should note.
Explored below is what an uninsured motorist policy will cover after an accident.
Bodily Injury
Your uninsured motorist policy will cover any medical bills related to the bodily injury you sustain from an accident.
Typically referred to as uninsured motorist bodily injury liability coverage (UMBI), this type of insurance will help pay for medical expenses and offer pain and suffering compensation.
Suppose your injuries are severe enough that you are forced to miss work. In that case, UMBI can also help pay for lost wages. In a worst-case scenario, UMBI coverage includes funeral expenses.
Property Damage
If your car was damaged significantly following an accident with an uninsured motorist, this part of the uninsured motorist policy helps you with repairing it.
Also referred to as uninsured motorist property damage coverage (UMPD), this type of uninsured motorist policy may include protection for your items if you are in an accident as a pedestrian or biker, depending on the circumstances.
Double-check with your motor vehicle insurance before assuming UMPD coverage. A collision deductible may be applied for this coverage. Also, remember that the availability of UMPD may vary by state.
Uninsured Motorist vs. Underinsured Motorist Coverage
Uninsured motorist and underinsured motorist coverage do the same thing: provide car insurance when you end up in an accident with a driver lacking the proper liability auto insurance. The only key difference is how these car insurance policies come into play.
For an uninsured motorist policy, your vehicle insurance company will pay out after an accident with a driver without insurance, such as an uninsured driver. Underinsured coverage assists with accidents involving a driver with some but not enough insurance, such as an underinsured driver.
Even though nearly every state requires some car insurance to drive your motor vehicle, you will find many drivers who want to save money by either not having car insurance and driving their car completely uninsured or buying the least amount possible of auto insurance.
Obtaining uninsured motorist or underinsured motorist coverages can benefit you as you never know who you will encounter on the road.
States that require uninsured and underinsured motorist coverage
Some states have requirements when it comes to uninsured motorist policies and others it can be added on as optional coverage.
There are 18 states, along with Washington, D.C., that require drivers to carry uninsured motorist coverage to protect themselves in case of a car accident with uninsured drivers or hit-and-run accidents.
New Hampshire and Vermont do not have any state laws about purchasing general car insurance policies. However, they mandate uninsured driver coverage upon buying an auto policy.
For states that require uninsured motorist insurance, you will need to buy whatever state-mandated minimum limit they require. Typically, the minimum state-mandated amount mirrors how much liability insurance coverage you purchase.
For example, suppose you have a liability coverage limit of $100,000 for bodily injury per person. In that case, your uninsured motorist limits for injury per person will be the same amount. However, this may only apply to states that require uninsured motorist insurance.
Suppose your state does not mandate uninsured motorist coverage. In that case, car insurers may still be required to offer you underinsured or uninsured motorist options when you purchase a car insurance policy. If you reject the underinsured motorist or uninsured motorist coverages, you would have to state so in writing.
Always double-check the requirements for underinsured motorist insurance and uninsured motorist coverages in your state. Uninsured motorist and underinsured motorist coverages can help you financially after a severe accident or by an uninsured or a hit-and-run driver.
Do You Need Uninsured Motorist or Underinsured Motorist Insurance Coverage?
Suppose your state does not require uninsured motorist and underinsured motorist coverages. In that case, you may still be thinking about purchasing it.
Adding to your existing car insurance policy naturally increases the costs; that is why it is a good idea to consider obtaining uninsured motorist and underinsured motorist coverages.
Below is what you should analyze about your current car insurance policies before purchasing uninsured motorist and underinsured motorist coverages.
Car Insurance And Property Damage
If you opt out of uninsured motorist or underinsured motorist coverage, you could add higher limits toward collision coverage.
Collision coverage is a car insurance policy offered by car insurance companies that covers your car in the event of an accident.
Suppose your vehicle is hit by someone else. In that case, you can file a car insurance claim using this type of auto insurance coverage. Collision coverage has a variety of accidents it will cover your car for, including uninsured drivers.
Being uninsured and collision may be redundant for your policy, but that depends on your circumstances. This could help determine whether uninsured motorist and underinsured motorist coverages are optional in your state. It also enables you to get closer to full coverage car insurance.
Car Insurance And Bodily Injury
Assistance for medical payments only sometimes will be paid from a car insurance claim.
Suppose you have a decent healthcare insurance plan. In that case, you can file an insurance claim to help cover expenses after a motor vehicle accident. However, it would help to analyze your health insurance policy before doing so.
If you have a high deductible for health insurance, consider deciding against this. Some car accidents can cost a lot, especially if you cannot work.
Uninsured motorist and underinsured motorist coverages help cover lost wages and funeral expenses, whereas health insurance will not. Uninsured driver coverage and underinsured motorist insurance also help you avoid copays.
Uninsured Drivers in Your State
As discussed previously, some states have more uninsured and underinsured drivers than others.
According to a 2021 report from the Insurance Research Council, Mississippi has the highest population, with nearly 30% of drivers lacking insurance. Some other states with a high number of uninsured drivers include Michigan and Tennessee.
New Jersey has the lowest uninsured driver count, with only around 3% of residents not carrying insurance. Other states with few uninsured drivers include New York and Massachusetts.
Living in a state with alarming numbers like Mississippi may convince you to obtain uninsured motorist coverage or underinsured motorist insurance. Auto insurance premiums may be higher as drivers filing a motor vehicle insurance claim could be more likely.
However, you at least have some peace of mind on the road. You never know when such car insurance can come in handy.
What is Stacking Car Insurance?
You can stack your uninsured motorist coverage depending on your car insurance company and state.
Stacking car insurance coverage helps you receive more money to help with expenses after an accident.
Two ways to “stack” insurance:
- Stack coverage for vehicles under one car insurance policy
- Stack coverage for vehicles under separate auto insurance policies, but both in your name
For example, if you have two cars under one car insurance policy and each has $75,000 for uninsured motorist bodily injury coverage, you could stack the uninsured motorist coverage for a car insurance policy limit of $150,000.
This means that if you got into an accident in a car under this car insurance policy, you would be covered for bodily injury up to $150,000 instead of the original coverage of $75,000.
If you have two separate car insurance policies under your name, with each vehicle having $20,000 in uninsured motorist coverage, you can still stack them. The total uninsured motorist coverage would be $40,000. Just make sure both car insurance policies are in your name.
Consider doing this if medical costs greatly exceed your initial uninsured motorist plan. Sometimes, car insurance can take you only so far, as outlined by car insurance policy limits.
In such cases, it is best to have a backup plan, like stacking auto insurance coverage. You could even make these adjustments when encountering an underinsured motorist who cannot cover your expenses.
Remember that when you stack car insurance, you may be subjected to extra fees. Stacking auto insurance must also be done when you buy a new or renew your current car insurance policy.
You cannot “stack” uninsured coverage right after an accident. To do this, double-check your car insurance rules regarding such a process. Some car insurers have chosen to enact an “anti-stacking provision.”
Uninsured Motorist Coverage And Hit-And-Runs
A hit-and-run is an accident where a driver damages something with their car and then flees the scene without exchanging contact or car insurance information with anyone.
Hit-and-runs may occur when a driver hits another car, property (ex., Mailbox or fence), or a pedestrian. But if uninsured motorist policy will cover property damage, it depends mainly on the state you live in.
A hit-and-run may be covered by uninsured motorist property damage and uninsured motorist bodily injury, but exceptions exist.
Six states where you can’t use uninsured motorist coverage in a hit-and-run:
- Colorado
- California
- Illinois
- Georgia
- Ohio
- Louisiana
If you live in one of these states, your best bet for car insurance after a hit-and-run is to contact your collision coverage for assistance if your car is damaged.
While collision coverage is optional regarding car insurance, it can be beneficial after an accident. It is best to analyze your car insurance policy and see what add-ons will be best for you and your car.
A lot of car insurance is centered around trying to anticipate the future. Assuming the worst-case scenario regarding car insurance can be your best assumption.
Are Uninsured Motorist and Underinsured Motorist Insurance Coverage Worth it?
Unless your state mandates uninsured motorist insurance, it is easier to give a definitive answer as to whether uninsured driver coverage would be best or worth it. Each person is different, meaning what kind of car insurance coverage they need will vary.
The best way to determine if you need uninsured motorist coverage or underinsured motorist insurance is by analyzing the stats of uninsured and underinsured drivers in your area.
It would help if you also looked at your current car insurance policy. While we have discussed the benefits of collision coverage for your car after an accident with an uninsured driver or underinsured motorist, you must be mindful of the bodily injury you could sustain.
Health insurance may only cover you so far and has components like copays and deductibles. Not having UMBI on your policy can be detrimental to you financially. It can offer you the best protection after a tragedy at a low cost.
One accident can cause much financial strain, with ridiculous car damage and bodily harm expenses. Ensure you have the proper coverage before getting behind the wheel of your car.
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