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Uninsured Motorist Coverage (Ultimate Guide)

A car accident can be very stressful. While we buy insurance to assist us after an anticipated accident, we can never truly mentally prepare ourselves to go through one. A lot suffers after an accident, from your car to yourself. Depending on the severity of an accident, you could be stuck handling the consequences for months or even years. But the circumstances following an accident only escalate when you realize the other driver is without any car insurance. In this case, you are suddenly stuck with thousands of dollars in medical and car repair expenses. For this uncommon incident, you will want some extended car insurance coverage, like uninsured motorist (UM) coverage. This piece serves as your guide to obtaining uninsured motorist coverage and how it can help you after an accident.

What is an Uninsured Motorist?

48 out of 50 states require drivers to carry a minimum amount of liability car insurance in order to legally drive. However, some drivers don’t follow those mandates. Whether it be an attempt to save money or a lack of caring, there are millions of drivers on the road who do not have the proper insurance coverage. Drivers who have no car insurance are known as uninsured motorists. Uninsured motorists may face some severe consequences for failing to drive with the state-mandated liability minimums. They could end up paying a fine. But their choice to drive without insurance not only affects them if they end up in an accident. You may be dealt quite the blow upon finding out the at-fault driver has no company to defer claims to.

What is Uninsured Motorist Coverage (UM)?

Getting in an accident with an uninsured motorist can be very financially draining. Many, if not all, insurance companies offer an add-on 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 coverage applies to you as the policyholder, along with any passengers you may have in the car. It helps you cover vehicle damage and any injuries as a result of the accident. Like liability coverage, some states require uninsured motorist insurance.

Uninsured motorist insurance can provide coverage when:

  • A driver who had no liability car insurance
  • A driver who lacks a sufficient amount of liability insurance
  • A driver whose insurance company refuses coverage or goes out of business

Encountering such a motorist can be worrying, but buying coverage to protect yourself and your assets will be the best step to ease worries after an accident. How to go about handling a driver of this sort and where uninsured motorist insurance helps is outlined in the next sections.

You should also be aware of how uninsured motorist insurance is expressed 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. If you have a plan with this type of coverage limit and you and a passenger are injured, the max amount of medical expenses your insurance will pay for is $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 are going to want to know how uninsured motorist insurance works. After an accident, you usually reach out to the other driver’s insurance company in order for their liability policy to cover damages and injury expenses. If the claim you make is approved, you will then go about repairing your car or paying medical expenses with the payout you receive. However, when there is no insurance company to contact, you are stuck with an avalanche of bills, scrambling to find a way to pay. This is where your uninsured motorist policy comes into play. After the accident, instead of having to pay the bills entirely yourself, you would file a claim to your car insurance provider. Uninsured driver coverage can come in handy during these situations and ease a lot of stress.

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 insurance, you will typically be on the hook for the costs. This can get pretty pricey if you have extravagant medical expenses or a car on the brink of being totaled. For these reasons, it is best to know how uninsured motorist insurance will step up to help you following an accident. There may also be some coverage limitations that you should take note of. Explored below is what uninsured motorist insurance will cover after an accident.

Bodily Injury

Any medical bills related to the bodily injury you sustain from an accident will be covered by your uninsured motorist policy. Typically referred to as uninsured motorist bodily injury (UMBI) coverage, this type of insurance will not only help pay for medical expenses but also offers pain and suffering compensation. If your injuries are severe enough that you are forced to miss work due to them, uninsured motorist coverage can also help pay for lost wages. In a worst-case scenario, UMBI includes funeral expenses.

Property Damage

If your car was damaged significantly following an accident with an uninsured motorist, this part of the policy helps you with repairing it. Also referred to as uninsured motorist property damage (UMPD), this type of coverage 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 insurance before assuming such coverage. A deductible may be applied for UMPD. Also, keep in mind that UMPD availability may vary by state.

Uninsured Motorist (UM) vs. Underinsured Motorist (UIM)

When shopping for uninsured motorist coverage, you will usually find that it is sold alongside underinsured motorist coverage. They basically do the same thing: provide you coverage when you end up in an accident with a driver lacking the proper liability coverage. The only key difference is how these insurance policies come into play. For uninsured motorist insurance, your company will pay out after an accident with a driver who has no insurance. Underinsured coverage assists with accidents that involve a driver who has some but not enough insurance. Despite the fact that nearly every state requires some amount of car insurance in order to drive, you will find many drivers who want to save money by either foregoing insurance or buying the least amount possible. Obtaining one or both of these coverages can be very beneficial for you in the future as you never know who you will encounter on the road.

How Much Does Uninsured Motorist Coverage Cost?

The cover for uninsured motorist coverage can vary based on your preexisting car insurance policy. Uninsured motorist insurance works as an add-on to your policy and tends to be fairly cheap. The average cost for uninsured motorist insurance is around $50-$75 per year, making that about $5 per month added to your rates. But like any type of insurance, your insurance premiums are determined based on a variety of personal factors, such as where you live. Some states have more uninsured drivers, which leads to an increase in uninsured motorist coverage rates. Obtain quotes or consult your insurance agent before buying any extra coverage for your car to get a good idea of how much insurance can affect your budget. Generally, uninsured motorist coverage is a very affordable add-on and typically costs less than liability insurance.

State Insurance Laws And Uninsured Coverage

As touched on briefly before, some states have requirements when it comes to uninsured motorist policies. There are 18 states, along with Washington, D.C., that require drivers to carry uninsured motorist coverage. New Hampshire and Vermont do not have any state laws about purchasing general car insurance policies. But they do mandate uninsured driver coverage upon the purchase of an insurance policy. For states that require uninsured motorist insurance, you will need to buy whatever state-manded minimum there is. Typically it mirrors how much liability insurance coverage you buy. For example, if you have a liability coverage limit of $100,000 for bodily injury per person, your uninsured motorist insurance for injury per person will be the same amount. But this may only apply to states that require uninsured motorist insurance. If you just have the option to purchase coverage, you are free to decide how much you would like.

If your state does not mandate uninsured motorist coverage, car insurers may still be required to offer it to you when you purchase a policy. If you reject the coverage, you would have to state so in writing. Always double-check the requirements of your state. But remember that just because your state does not require such coverage does not mean you should ignore it. Uninsured motorist coverage can really help you financially after a serious accident.

Do You Need Uninsured Motorist Coverage?

If uninsured motorist coverage is not required in your state, you may still be wrestling with the idea of purchasing it. Adding to your existing car insurance policy naturally increases the costs; that is why it is a good idea to really sit and think about obtaining such coverage. Outlined below is what you should analyze about your current insurance policies before purchasing uninsured motorist coverage.

Car Insurance And Property Damage

If you opt-out of an uninsured motorist policy, you could lean more towards the direction of collision coverage. Collision coverage is a policy offered by car insurance companies that covers your car in the event of an accident. If your car is hit by someone else, you can be able to file a claim using this type of coverage. Collision coverage has a variety of accidents it will cover your car for, including uninsured drivers. Having both uninsured and collision may be redundant for your policy, but that depends on your personal circumstances. This could be useful looking into if uninsured motorist insurance is not required in your state. It also helps you get a step closer to having full coverage car insurance.

Car Insurance And Bodily Injury

Assistance for medical payments doesn’t always come from car insurance. If you have a decent healthcare insurance plan, you may be able to file a claim through that to help cover expenses after an accident. But you will really have to analyze your health insurance policy before doing so. If you have a high deductible for health insurance, you may want to decide against this. Some accidents can cost a lot, especially if you are unable to work. Uninsured motorist insurance helps cover lost wages and funeral expenses, whereas health insurance will not. Uninsured driver coverage also helps you avoid copays.

Uninsured Drivers in Your State

As discussed previously, some states have more uninsured 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, such as those in Mississippi may convince you to obtain uninsured motorist coverage. Premiums may be higher as drivers filing a claim could be more likely, but you at least have some peace of mind on the road. You never know when such insurance can come in handy.

What is “Stacking” Car Insurance?

Depending on your car insurance company and the state you live in, you may have the ability to stack your uninsured motorist coverage. Stacking car insurance coverage helps you receive more money to help with expenses after an accident. There are typically two ways you can go about “stacking” insurance:

  • Stack coverage for vehicles under one insurance policy
  • Stack coverage for vehicles under separate insurance policies but both in your name

For example, if you have two cars under one insurance policy and they each have $75,000 for uninsured motorist bodily injury coverage, you could choose to stack the coverage for a policy limit of $150,000. This would mean if you got into an accident in a car under this policy, you would be covered for bodily injury up to $150,000 as opposed to 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 would still be able to stack them. The total coverage would be $40,000. Just make sure both car insurance policies are in your name.

This would be best to consider doing if you have medical costs that greatly exceed your initial uninsured motorist insurance plan. Sometimes car insurance can take you only so far, as outlined by policy limits. In cases like these, it is best to have some sort of backup plan, like stacking coverage. You could even attempt to make these adjustments when you encounter an underinsured motorist and are unable to cover all of your expenses.

Keep in mind that when you choose to stack car insurance, you may be subjected to extra fees. Stacking insurance must also be done when you either buy a new policy or renew your current one. You cannot “stack” uninsured coverage right after an accident. If you are interested in doing 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 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 insurance will cover property damage 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 do exist.

When it comes specifically to property damage coverage, there are six states where you are not allowed to use uninsured motorist property damage in the event of a hit-and-run:

  • Colorado
  • California
  • Illinois
  • Georgia
  • Ohio
  • Louisiana

If you live in one of these states, your best bet for insurance after a hit-and-run is to turn to your collision coverage for assistance if your car is damaged. As previously discussed, while collision coverage is optional when it comes to car insurance, it can be very useful after an accident. It is best to analyze your policy and see what kind of add-ons will be best for both you and your car. A lot of insurance is centered around trying to anticipate the future. Assuming the worst-case scenario when it comes to car insurance can be the best assumption you ever make.

Filing an Uninsured Motorist Claim

If you find yourself in a car crash and the at-fault driver lacks insurance, you will need to then reach out to your insurance company and make a claim. After explaining the situation and detailing what has occurred, your uninsured motorist insurance should come into play. You will want to stay vigilant and organized when going to make a claim. Collect as much information as you can from the other motorist. This includes names, addresses, and phone numbers. If police are involved, they will also be collecting information, but it is good to have your own copy. Also, be mindful of any police reports filed on the situation. Once all of this has been completed, make a claim with your insurance company immediately. Some car insurers have limits on how long after an accident they will let you make a claim. Keep records of all medical expenses, and car repairs as your insurance company will want to double-check what they have paid for.

Is Uninsured Coverage Worth it?

Unless your state mandates uninsured motorist insurance, it is hard to give a definitive answer whether if uninsured driver coverage would be best or worth it for you. Each person is different, meaning what kind of insurance coverage they need will vary. The best way to begin to look at if you need uninsured motorist coverage is by analyzing the stats of uninsured drivers in your area. As previously mentioned, if you live in a state where the number of uninsured drivers is high, while you may end up paying a bit more for it, this type of motorist coverage can be very helpful. You should also be looking at the current car insurance policy you have. While we have discussed the benefits of collision coverage for your car after an accident with an uninsured driver, you have to be mindful of bodily injury you could sustain. Health insurance may only cover you so far and has components like copays and deductibles. Foregoing uninsured motorist bodily injury coverage can be determinantal to you financially. For a low cost, it can potentially offer you the best coverage after a tragedy. One accident can cause a lot of financial strain with ridiculous expenses for both car damage and bodily harm. Make sure you have the proper coverage before getting behind the wheel of your car.