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Finding yourself involved in a car accident and discovering the at-fault driver doesn’t have insurance is a troubling experience. Considering the fact that 13% of U.S. motorists are uninsured, the above scenario may be more common than you are actually thinking. Countless victims have been unable to recoup financial compensation due to underinsured or uninsured drivers, but uninsured motorist coverage can act as a safety net against this.
This specialty type of car insurance protects you when the other party involved in the wreck cannot due to not having insurance. Learn the ins and outs of uninsured motorist coverage, why it matters, and whether it’s a wise investment for your auto insurance policy.
What is Uninsured Motorist Coverage?
Starting with the basics, for those who don’t know the term, uninsured motorist coverage is a type of auto insurance designed to cover damages when an at-fault driver has no insurance. In some cases, underinsured motorist coverage, a related option, may kick in if the other at-fault driver has insurance but if their coverage is insufficient to cover your losses. Typically, uninsured motorist coverage includes two key components:
- Bodily Injury Coverage: Covers medical expenses, lost wages, and pain and suffering
- Property Damage Coverage: Pays for repairs or replacement of your vehicle
If you are hit by an uninsured driver or if you are the victim of a hit-and-run and cannot locate the other driver, UM coverage will help cover expenses that otherwise would have needed to come out of your pocket. Many states require insurance companies to offer UM coverage, but it’s often optional whether or not you add it to your policy. Making the choice not to, however, could leave you financially exposed after an accident.
Why Uninsured Motorist Coverage Matters
The high number of uninsured drivers on roadways today poses a significant risk to insured drivers. Even in states that have mandatory auto insurance laws, some individuals drive without coverage due to the cost of insurance or pure negligence. If you are on your way home and hit by an uninsured driver who runs a red light, you might solely be on the hook for your health insurance costs as well as any costs associated with medical bills and repairs.
Moreover, liability insurance, the type of insurance required in most states, only covers damages that you cause to others. This means that the liability coverage of the other driver will not help you personally. Uninsured motorist coverage fills this gap which helps to ensure you aren’t left footing the bill for a mistake someone else makes.
How Much Does Uninsured Motorist Coverage Cost?
Adding uninsured motorist coverage to your auto policy is generally an affordable decision to consider. On average, adding this type of coverage to your plan will only increase your overall payments by $50-$100 per year depending on factors such as your location, driving record, and coverage limits. For such a modest premium, the potential benefits you could have are substantial.
Uninsured motorist coverage can save you thousands of dollars in medical expenses, vehicle repairs, and other costs after an accident. When compared to the financial risks of going without this coverage, the additional cost proves to be a wise investment for many people.
Do You Really Need Uninsured Motorist Coverage?
While uninsured motorist coverage is not legally required in all states, it is strongly recommended for drivers in certain circumstances. You might benefit from the coverage of uninsured motorist protection if:
- You live in a state with a high rate of uninsured drivers. States like Florida, Mississippi, and New Mexico have some of the highest rates, making UM coverage especially important for the road
- You’re a frequent driver. Commuters, rideshare drivers, and others who spend significant time on the road face a higher risk of encountering uninsured drivers, making uninsured motorist coverage all the more helpful
- You lack savings to cover unexpected expenses. If an accident could financially devastate you, UM coverage provides critical protection that you wouldn’t otherwise have
With the above said, some people may opt out of this type of coverage if they have substantial savings or would prefer to rely on their health insurance coverage for medical costs in an accident. Just be aware that costs can be more significant than you think and that other types of insurance, such as health insurance, won’t assist with property damage.
Tips for Choosing the Right Uninsured Motorist Coverage
If you do decide to add uninsured motorist coverage to your auto insurance policy, consider some of the following quick tips to ensure the coverage you’re looking at meets your needs:
- Assess Your Financial Situation: Choose coverage limits that align with your budget and potential risks; a common recommendation is to match your UM limits with your liability coverage limits
- Understand Your State’s Requirements: Some states mandate UM coverage or set minimum coverage limits, while others leave it optional so be aware of local regulations when selecting your policy
- Ask Your Insurance Provider Questions: Understand what’s covered under UM and UIM coverage, such as whether it includes payments for pain and suffering or hit-and-run accidents
- Compare Quotes: Different insurers offer varying rates and terms for UM coverage, so shop around to find the best value rather than settling for the first option you see
- Evaluate Your Driving Habits: Frequent drivers, commuters, and those in high-traffic areas face a greater likelihood of accidents, so if this describes you, consider higher coverage limits for better protection
By following the above tips, you can tailor your uninsured motorist coverage to your needs in order to maximize the financial protection you have while balancing affordability.
Protect yourself from the unexpected on the road
Uninsured motorist coverage provides you with peace of mind on an unpredictable road. It will help to protect you financially when others fail to carry adequate insurance, thereby offering a critical safety net for medical expenses, lost wages, and property damage. Given its affordability and the risks that exist with uninsured drivers, uninsured motorist coverage is almost certainly a worthwhile investment for most drivers. Take the time to review your current auto insurance policy and speak with your agent about adjusting that policy to include or expand your uninsured motorist coverage if it suits your needs. This is a small step that could make a big difference when you need it most.