Key Takeaways
- Protects against injuries from uninsured or underinsured drivers.
- Covers medical bills, lost wages, and sometimes property damage.
- Mandatory in 20 states; offered everywhere else as optional.
- UMPD covers vehicle damage from uninsured drivers, differs from collision.
What is Uninsured Motorist Coverage (UM)?
Uninsured Motorist Coverage (UM) is an auto insurance add-on that protects you and your passengers if you’re injured by a driver without insurance, inadequate coverage, or in a hit-and-run. It helps cover medical expenses, lost wages, and sometimes property damage when the at-fault driver cannot pay.
This coverage is essential in states where uninsured drivers remain a significant risk, and it often complements other policies regulated by organizations like the NAIC.
Key Characteristics
UM coverage includes several components tailored to different risks. Key features include:
- Bodily Injury Protection: Covers medical bills, pain and suffering, and funeral costs for you and your passengers.
- Property Damage Coverage: Pays for repairs to your vehicle or property damaged by uninsured or hit-and-run drivers; not available in all states.
- Combined or Split Limits: Coverage limits may be expressed per person or per accident, depending on state laws.
- Mandatory or Optional: Required in some states, while others offer it with an opt-out option.
- Hit-and-Run Protection: UM applies even if the at-fault driver cannot be identified, up to policy limits.
How It Works
When you’re injured in an accident caused by an uninsured or underinsured motorist, UM coverage steps in to pay your medical expenses and other damages up to your policy limits. This avoids the need to sue a driver who likely cannot pay.
Property damage coverage under UM reimburses you for vehicle repairs in specific uninsured scenarios, often with a lower deductible compared to collision coverage. You can also stack UM limits across multiple policies in some states to increase your protection.
Examples and Use Cases
UM coverage proves invaluable in various real-world situations:
- Hit-and-Run Incidents: If a driver flees the scene causing $40,000 in injuries, UM can cover your medical costs without identifying the at-fault party.
- Underinsured Driver: When another driver’s liability limits are insufficient, UM fills the gap to cover your full expenses.
- Travel Risks: Companies like D&B and AAA often advise customers on including UM coverage to mitigate risks during road trips.
- Financial Planning: Including UM in your insurance portfolio complements your overall risk management, similar to choosing the right credit cards for bad credit.
Important Considerations
UM coverage limits are capped by your policy, so purchasing adequate amounts is crucial to avoid out-of-pocket expenses. Review your coverage annually, especially if your financial situation changes or you add vehicles to your policy.
Since UM rules vary by state, and some exclude property damage, consult your insurance agent and resources like the UDAAP guidelines to understand your rights and protections fully.
Final Words
Uninsured Motorist Coverage shields you from costly gaps when others lack sufficient insurance, making it a valuable safeguard. Review your current policy limits and consider adding or adjusting UM coverage to ensure adequate protection based on your state's requirements and your personal risk.
Frequently Asked Questions
Uninsured Motorist Coverage (UM) is an auto insurance add-on that protects you and your passengers if you're injured or your property is damaged by a driver who has no insurance, insufficient insurance, or who flees the scene in a hit-and-run.
Yes, UM covers medical expenses, lost wages, pain and suffering, and sometimes vehicle repairs if the at-fault driver lacks adequate insurance or is uninsured. However, property damage coverage (UMPD) is not available in all states.
UM coverage is mandatory in 20 states plus Washington D.C., while in others it's optional but insurers must offer it. Some states require you to sign a waiver if you choose to decline the coverage.
UMPD covers vehicle damage caused by uninsured or underinsured drivers and usually has a lower deductible, while collision coverage pays for damage regardless of fault but often comes with higher deductibles and higher premiums.
Yes, it’s recommended to purchase UM limits that match or exceed your liability limits since medical and repair costs can be high. In some states, you can also stack coverage across multiple vehicles to increase your payout.
Yes, bodily injury components of UM coverage typically protect not only you and your passengers but also pedestrians injured by uninsured or underinsured motorists.
If you have UM coverage, you can file a claim with your own insurer to cover your medical bills and damages. Without UM, you might have to sue the at-fault driver, who often cannot pay for your expenses.
State laws vary: some require UM coverage, some offer it as optional, and some have unique rules like New York’s Supplementary UM or Texas’s coverage including rental cars. Always check your state's specific requirements and options.
