Why do you need to buy uninsured/underinsured motorist (UM/UIM) coverage? Because of the other guy.
The Insurance Research Council estimates that one in eight drivers don't have auto insurance.
Other types of auto insurance protect the value of your car -- that's what collision is for -- and liability protects your valuable assets from a lawsuit. ninsured and underinsured motorist coverage
We get questions every day from people asking why they need UM/UIM coverage and how they should handle uninsured motorist claims. The answers:
The driver that hit you is considered uninsured if:
A driver is underinsured in cases where his or her coverage limits are not high enough to pay for all the damages incurred.
Almost never. Property damage where the culprit can't be identified are usually handled under your own collision coverage. This includes accidents where a hit-and-run driver damages your car while it's parked. It may not seem fair to have to pay for something that wasn't your fault, but it keeps auto insurance rates lower for the majority of accidents.
Uninsured/underinsured motorist bodily injury coverage pays for many things that other types of insurance usually don't, such as lost wages and pain and suffering. So, it's not really a waste to purchase it even if you think you're covered otherwise.
If you have a high deductible for your health insurance, UM/UIM can cover your deductible.
UM/UIM coverage protects you and your family and passengers, not the other driver. It's true that the person who hit you should have purchased the coverage, but having UM coverage allows you to quickly receive payment for your claim, saving you the time and expense of suing the other driver. Your insurance company will pursue the guilty driver to recover the money it had to pay.
The other driver doesn't need to admit fault. Your auto insurance company (or a court) will determine fault and handle your UM/UIM claim based on their investigation of the facts. If they find the uninsured driver at fault, then you will be entitled to payment up to the limits of UM/UIM coverage you purchased.
You can never collect more than your policy's UM/UIM limit for claims under this coverage. Most people buy UM/UIM coverage in an amount that matches their bodily injury liability limits, but you can choose to buy less UM/UIM coverage if you wish. For example, if you buy 100/300 BI limits (100 per person/300 per accident), but choose to buy 50/100 limits for UM/UIM, you can collect up to $50,000 per person in an accident with an uninsured driver, up to a maximum of $100,000 for all drivers injured in the same accident.
For UIM coverage, the total amount you can collect from both the other driver's insurance company and your own is the number shown on your policy – in this example 50/100. You don't normally add that to what you get from the other driver – although you can in a few states.
No. UM/UIM coverage is something you buy to protect yourself – and your property, if you purchase UMPD coverage. You're essentially protecting yourself from drivers who don't have auto insurance or don't have enough to pay for accidents they cause.
UMPD is available only in certain states, so unless it was offered to you when you bought your policy, it's probably not an option. And, if you're making a loan or lease payment on your car, you'll be required to buy collision coverage until it's paid for. After that, you can choose – knowing that UMPD coverage will only pay for damage caused by an uninsured driver you can identify.
So, if you have to pick one, remember that collision coverage will pay for all situations involving an accidental collision. If opting for collision coverage simply won't work financially, UMPD can serve as a last resort. In a limited number of states and situations, you can purchase both, and we recommend you do so, if that option is available.
Unfortunately, it doesn't, unless you can prove that it came from a specific uninsured motorist. Remember that the coverage you've purchased is Uninsured Motorists Property Damage coverage – so you must find the motorist who's at fault before you can get paid.
Uninsured/Underinsured motorist coverage (UM/UIM) refers to two separate but similar coverages: UM (Uninsured) and UIM (Underinsured).
1. UM: This coverage can be divided into Uninsured Motorist Bodily Injury (UMBI) and Uninsured Motorist Property Damage (UMPD). Both are comparatively cheap coverages.
2. UIM: This can pay for injuries the same way UMBI does, but for drivers who have auto insurance that is lower than your policy's limit.
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