Uninsured Motorist Coverage Explained in Simple Terms

uninsured motorist coverage

Uninsured Motorist Coverage Explained in Simple Terms

According to a 2021 report from the Insurance Research Council, about one in eight drivers don’t carry car insurance. If you are injured in a car crash caused by a driver who doesn’t carry liability car insurance, you can easily be stuck with huge expenses like medical bills and health insurance deductibles.

And if your injuries cause you to miss work, you can also lose your wages. These are the cases in which uninsured motorist coverage can help you. To understand uninsured motorist insurance, here’s a simple breakdown of all the information you need.

What is Uninsured Motorist Coverage?

Uninsured motorist insurance protects you from spending money on injuries or property damage from crashes you didn’t cause. In some states this type of coverage is required, while other states require your insurance company to offer you the coverage. Typically, you can reject this coverage in writing if you don’t want it.

Uninsured motorist coverage pays for medical bills and other expenses for you and your passengers if you’re in a car accident caused by:

  • A driver who doesn’t have any liability car insurance
  • A driver who doesn’t have enough liability insurance to cover your medical bills
  • A driver whose insurance company denies coverage or goes out of business

Furthermore, if you suffered from uninsured motorist bodily injuries, your coverage can pay for:

  • Lost wages if you can’t work due to the accident
  • Pain and suffering compensation
  • Funeral expenses
  • Medical bills

What is the Difference Between Uninsured and Underinsured Coverage?

If you were looking for more information on uninsured motorist insurance, you probably ran into a similar term that might have confused you ⁠— underinsured motorist coverage.

Underinsured motorist coverage steps in when you are in an accident with an at-fault driver whose liability limits are too low to cover the medical expenses of anyone who was injured. The at-fault driver’s insurance will typically pay for all damages up to their auto insurance policy limits. After that, your underinsured motorist coverage may cover the excess amount up to the limits you select.

Uninsured motorist insurance, on the other hand, protects you if you are in an accident with an at-fault driver who doesn’t carry liability insurance.

How Uninsured Motorist Coverage Works

Let’s say you’re involved in an accident that wasn’t your fault. Usually, you’d file a claim with the at-fault driver’s car insurance company, repair your car and recoup compensation for any medical expenses. In other words, you wouldn’t have any additional expenses to pay.

But what if the driver who caused the accident doesn’t have car insurance or simply doesn’t have enough of it? Liability insurance requirements don’t always offer enough coverage after a car accident. In this case, you could file an uninsured motorist claim and your uninsured coverage could help you protect your finances.

What Does Uninsured Motorist Coverage Pay For?

Uninsured motorist insurance covers injuries and damages that you, family members in your household or passengers in your car suffer after an accident with an at-fault driver who has no insurance.

There are two types of coverage that uninsured motorist insurance provides:

  • Uninsured Motorist Bodily Injury: this type of coverage pays for medical bills, pain and suffering, lost wages if you are not able to work after an accident and funeral expenses after a crash with an at-fault driver who doesn’t have car insurance. Uninsured motorist bodily injury coverage also pays for your expenses if you are hit as a pedestrian while riding your bike.
  • Uninsured Motorist Property Damage: this type of coverage pays for damage to your car or property after an accident with an at-fault driver with no car insurance. In this case, a deductible may apply.

Of course, if you are looking for more protection, you may want to consider other types of full coverage. Usually, you are not able to buy a specific full coverage policy, but have in mind that this term often refers to a combination of coverage including comprehensive and collision insurance combined with state-mandated coverage like liability insurance and uninsured motorist coverage.

How to Add Uninsured Motorist Coverage to Your Existing Policy

Adding uninsured motorist coverage to your existing auto insurance policy is generally a straightforward process. Start by reaching out to your insurance agent or logging into your account if your provider offers online services. Most insurance companies provide an option to modify your coverage.

Here, you can add uninsured motorist coverage and even adjust the limits according to your needs. It’s advisable to get quotes from multiple insurance providers too, to ensure you’re getting the best rate possible.

Once you’ve made your selection, review the updated policy terms carefully. Pay close attention to the new premiums, the coverage limits, and any deductibles that may apply. Remember, choosing higher limits will provide you with greater protection but will also result in a higher premium. The aim is to strike a balance between adequate coverage and affordability.

After you’re satisfied with the terms, you’ll likely need to confirm the changes and possibly make an immediate payment to activate the coverage. From this point on, you’ll have the peace of mind that comes from knowing you’re protected against uninsured drivers on the road.

Uninsured Motorist Coverage Limits

Uninsured motorist fees are usually expressed as two numbers, for example:

  • $100,000 bodily injury coverage per person
  • $300,000 bodily injury coverage per accident

Let’s say you have four passengers who are injured, and they have high medical bills. In this case, your maximum uninsured motorist payout is $300,000. However, you can generally turn to health insurance after your uninsured motorist coverage is exhausted.

What Happens if I Don’t Have Uninsured Motorist Coverage?

If you don’t have uninsured motorist insurance and you get hit by someone without insurance, you have the right to sue the at-fault driver in court. But you would most likely have to hire a lawyer and the legal process could last a long time.

One of the biggest benefits of uninsured motorist coverage is that it pays for your medical expenses, but also for lost wages, pain and suffering. In any case, it’s easier to have an insurance company cover your medical bill than to wait for the court to resolve it.

Do I Need Uninsured Motorist Coverage?

If your state doesn’t require uninsured motorist coverage, you might wonder whether you need to add it to your vehicle insurance policy. Here are a few simple questions that will help you make the right decision.

Do You Have Other Insurance to Cover Car Accident Injuries?

The main function of uninsured motorist insurance is to cover medical bills after a car accident with an uninsured driver. If you already have good health insurance, you may feel like you don’t need an additional uninsured motorist policy. However, if you have a high deductible health plan and would pay a large amount of money for hospitalization, uninsured motorist coverage might be a good idea to consider.

The reason for this is because uninsured motorist coverage is a way to save money on co-insurance copays and health insurance deductibles. This type of insurance also provides other benefits that health insurance doesn’t, like money for pain and suffering and lost wages. The average uninsured motorist claim for injuries is $29,825, according to the National Association of Insurance Commissioners’ report.

Do You Have Other Insurance to Cover Car Damage?

In states where uninsured motorist property damage coverage is available, you may not need it. In these states, collision insurance will also cover damage to your car if someone else hits it, and it will cover you in many other circumstances, not just in the case of an uninsured driver.

Did you like this article? If so, make sure you read more about the best ways to keep your fleets safe as well!