What is Uninsured/Underinsured Motorist Coverage?

Have you ever been involved in a car accident when the other driver did not have enough liability coverage? Or, even worse, they drove off? According to the Insurance Research Council, one of every eight drivers is uninsured/underinsured. That is a staggering number, and some states have made uninsured motorist coverage a requirement to protect those law-abiding drivers. Unfortunately, Texas and Oklahoma do not require this coverage.

Here are some things you should know about supplementary uninsured/underinsured motorist coverage, also known as UM/UIM coverage.

How Does Uninsured/Underinsured Motorist Coverage Work?

Let’s say you get into a car accident, and it is not your fault. Typically, you contact the at-fault driver’s insurance company, file a claim, get your car repaired, and receive compensation for lost wages and/or medical expenses.

But what if the other driver doesn’t have insurance, or you are involved in a hit-and-run. Now you have the added stress of financial matters—how will you afford having your car repaired, medical expenses, and lost wages! Uninsured motorist insurance covers you and other passengers in the vehicle for bodily injury, and if your state offers it, property damage*.

You can also receive coverage when dealing with a driver whose liability limits are inadequate. This is referred to as underinsured motorist coverage. First, the other driver’s insurance will pay for as much bodily injury and property damage costs as it can. Then, your UIM insurance will cover any remaining costs as long as they don’t exceed the limits stated in your policy.

Different Types of Uninsured/Underinsured Motorist Coverage

There are two different types of UM/UIM coverage: bodily injury and property damage. Bodily injury coverage takes care of lost wages, medical expenses, and injury expenses for the insured person and his or her passengers. Property damage covers damages made to your vehicle if the at-fault driver is uninsured or underinsured (not applicable in hit-and-run scenarios).

Having proper insurance policies and coverage amounts can give you peace of mind as you go about your day. Please contact one of our Insurance Representatives if you would like to learn more about your different insurance options and to determine the coverage amount that’s right for you.