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Uninsured/Underinsured Motorist Coverage

May 24, 2016 by Jonathan Stein

Of all the automobile insurance coverage that exists, Uninsured Motorist Coverage (UM) is THE MOST important coverage. (In California, uninsured motorist also acts as underinsured motorist coverage.)

Why is Uninsured Motorist Coverage so Important? If you buy UM coverage and a driver who has no insurance injures you, your insurance company will pay your damages up to the limit of your UM coverage. Since the other driver is uninsured, or underinsured, your insurance company “steps into the shoes” of the insurance the other party should have had and pays the claim. UM coverage also will pay you if you are the victim of a “hit and run” and the other driver is never caught. However, you must meet certain requirements, but this coverage can be very important. For example, if you are hit by a hit and run driver, you need to have the license plate number and a police report to have coverage under most policies. 

Example: You are stopped and hit by a person who has no insurance. You are injured as a result of the collision. Your insurance company will pay you for your injuries since the other person did not have insurance. 

UM also acts as Underinsured Coverage. If you get hit by someone who has less insurance than you, and your injuries are worth more than the other person’s insurance, your insurance company will pay you the amount of your claim up to the limits of your
coverage.

Example: You are stopped and hit by a person who has a $15,000 policy. You are injured and your medical bills are $30,000. His insurance company will pay you the $15,000 and your insurance company will pay you the difference. However, they only pay you up to your limit. So if your limit is $25,000, you would only be paid $10,000 more. 

Does this sound like something your insurance company has told you? Probably not.

Why aren’t they telling you this? Well, uninsured motorist coverage is relatively inexpensive to increase. Therefore the increase from a $30,000 insurance policy to a $100,000 policy generally will only cost you a few more dollars per policy. However the coverage is substantially greater, in this case, more than three times greater.

Why is this the most important insurance coverage you can have? Uninsured motorist and underinsured motorist protect YOU! Let me say that again: this insurance protects you. Let’s say you are the sole income earner in your house. An uninsured motorist hits you and makes it so you can’t work for 6 months. Your uninsured motorist coverage makes sure that you get compensated for your injuries. Why would you have $100,000 of protection for other people but only $15,000 or $25,000 for yourself? You wouldn’t but because most people don’t really understand this coverage, they make this mistake – constantly! And your agent doesn’t tell you this! 

Remember, about half of all drivers in California are uninsured. About another 25% are underinsured. So 3 out of every 4 drivers do not have enough insurance to compensate you if you are injured or your car is damaged in a crash. Your solution is uninsured motorist coverage. 

Have any questions on this? Email me or call for a free consultation! 

Categories: Auto Insurance, Claims, Consumer Issues, Current Affairs, Hiring an attorney, Homeowners Insurance, Insurance Operations, Law, Personal Injury Tags: car accident, car crash, car rental, cell phone, collision, contingency fee, drive and text, extra insurance, fair market value, insurance company, insurance coverage, insurance privacy, loss of use, Minimum Impact, Minimum Impact Soft Tissue, MIST, motor vehicle accident, motor vehicle crash, MVA, MVC, policy limits, privacy, property damage, rental, rental car, rental coverage, rental reimbursement, repairs, text and drive, total loss, UMBI, UMPD, uninsured motorist, uninsured motorist bodily injury, uninsured motorist property damage

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