Uninsured & Underinsured Motorist Protection

What Exactly Is Uninsured Motorist Protection?

Uninsured motorist coverage provides for your financial damages if you are in an accident caused by someone who does not have insurance. UIM comes in two varieties:

•Uninsured motorist bodily injury coverage pays for your own medical expenditures if you are involved in a car collision with an uninsured driver. It's comparable to liability bodily injury coverage, which pays for the other driver's medical bills in the event of a car collision.

•Property damage coverage for uninsured motorists If you're in an accident with someone who isn't insured, it costs to fix your own automobile It is comparable to liability property damage insurance, which covers damage to the other driver's vehicle.

Uninsured/underinsured motorist insurance covers the following:

Injuries caused by uninsured/underinsured motorists (UIM BI)

•Expenses for hospitalisation or medical treatment

•Wages lost as a result of your inability to work as a result of your injury

•Replacement services, such as home cleaning and childcare, that you are unable to provide due to accident injuries.

Property damage caused by uninsured/underinsured motorists (UIM PD)

•Your car has been damaged.

•Your home has been damaged.

UIM limits are often written in three sections, such as $25,000/$50,000/$25,000. The first figure reflects the amount an insurer will pay for each person if an uninsured motorist collides with your vehicle. The insurance will pay up to $50,000 for all injuries resulting from the accident (the second figure) and up to $25,000 for any property damage (the third number).

Uninsured/Underinsured Motorist Coverage Is Needed In Which States?

UIM is mandatory in 20 states. The physical injury form of the coverage is usually required. In a few states, you are forced to have UIM property damage coverage, whilst in others, the policy is not even available. The states that require UIM are shown in the table below:

UIM limits are normally set in accordance with the state's minimum limits for bodily injury and property damage liability coverage. In many circumstances, we urge that drivers acquire more than the state requirement.

What Is The Cost Of Uninsured/Underinsured Motorist Coverage?

UIM is significantly less expensive than normal personal injury and property damage insurance. Premiums for a $25,000/$50,000 coverage range from $33–$76 per year, according to representative quotations for a 34-year-old married male. The price for insurance with four times the coverage — limits of $100,000/$300,000 — was just $86–$134 per year.

UIM is substantially less expensive than liability coverage, however pricing vary by state. This is because certain states have a higher number of uninsured drivers, which means you're more likely to utilize UIM coverage.

The costs shown here are based on Geico quotations.

*Presented uninsured and underinsured motorist insurance as a single premium, which was then divided in half to illustrate the amount for each.

Is Uninsured Motorist Coverage Worthwhile?

Following an automobile accident, the average hospital bill is roughly $60,000. In most circumstances, UIM coverage is worthwhile to have - getting a policy that covers this sort of expenditure won't cost much.

If your coverage is $25,000, an automobile accident caused by an uninsured motorist covers less than half of the costs, leaving you on the hook for the remainder. When determining your insurance limits, keep your net worth in mind. That is the total amount of all of your assets, such as house equity, after deducting all of your obligations, such as student loan debt. So, if your net worth is $50,000, your UIM limitations should be $50,000 or higher. Fortunately, the price difference between low and high coverage limitations is little.

You should only contemplate not having UIM insurance if you reside in a no-fault jurisdiction where personal injury protection (PIP) is required, such as Florida or Michigan. PIP compensates you for your injuries regardless of whether the other motorist is insured.

Furthermore, if you have comprehensive and collision insurance, any automobile damage you sustain will be covered, regardless of whether the other motorist is insured. Both coverages, however, will raise the cost of your vehicle insurance policy.

If your existing vehicle policy does not match the right side of the chart, you should definitely consider acquiring UIM. Getting PIP, collision, and comprehensive insurance on the same policy, on the other hand, maybe too expensive for many people.

As we will see in the following section, UIM may be the most realistic and cost-effective alternative.

What Exactly Is Stacking?

Stacking enables you to combine uninsured/underinsured policy limits, increasing your protection. Depending on your state's laws, you may be allowed to stack coverage on numerous vehicles under the same policy or across multiple plans.

Here's how stacking policies on top of each other works.

In some areas, you can combine UM/UIM coverage limitations from several vehicle insurance policies.

In some areas, if you are wounded as a passenger or pedestrian, you may submit a claim against numerous insurance. So, if you're a passenger in a car hit by an uninsured driver, you're protected by two policies: your auto insurance policy and your driver's policy.

How can I make a claim for an uninsured/under insured motorist?

Filing a claim for UM and UIM might be difficult at times. Because your insurer is essentially replacing the other driver's insurance company, you may have to substantiate your case. Your insurance may also refuse to pay unless the other motorist is primarily to blame for your injuries, which may need a court decision to assess the level of culpability. Your claim settlement may also be determined by the negligence laws of your state.

Maintain A Paper Trail

You will have discussions with a variety of persons during the claims process. Begin a file to record phone conversations and meetings, as well as who you spoke with and what they said. Keep receipts for anything you spent prior to achieving an insurance settlement, such as supplies for interim repairs and living expenditures if your house is uninhabitable.

You may aid your case by gathering the following information:

•A detailed written account of what occurred

•Photographs of the site, as well as any injuries you receive

•Medical examination records and any bills from doctors and health care providers

•Receipts for all associated expenditures

•Proof of lost wages and prospective income if your injuries prevent you from working.

Remember the following after making a claim:

•You should receive a response within the time range specified by your state and insurance. Keep an eye out for information on potential delays.

•Prepare to talk about the situation. A liability claims adjuster may have inquiries concerning your injuries and the claim's cost.

•You may be required to complete the claims procedure and achieve a settlement agreement within a specific time range. If you disagree with the offer, you either accept it or initiate a lawsuit.

•Your insurer will request that you forgo any future rights to sue the individual or corporation for additional payments following the settlement. You should have an attorney analyze the settlement and release it before signing it.

•Understand your legal rights. If your state allows stacking, you may be able to request a bigger compensation in specific situations.