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Uninsured & Underinsured Motorist Coverage

Is it worth it to get uninsured/underinsured motorist insurance coverage? Learn more about this valuable coverage here.

What’s Uninsured/Underinsured Motorist Insurance Coverage?

Uninsured/underinsured motorist insurance coverage protects you if you're involved in an accident with someone who does not have insurance or does not have enough liability to cover damages caused in an auto accident. Uninsured motorist insurance covers hit-and-run accidents as if the other driver is at fault and he/she does not have liability insurance or has less liability insurance they are responsible to cover the damages.

Let’s explore the various components of uninsured and underinsured motorist insurance, as well as some of the reasons why you need to consider it.

Definition and Basics of Uninsured/Underinsured Motorist Insurance

Liability insurance is a requirement by law in the vast majority of states but you will still find many drivers that don’t have car insurance. A good number of drivers have the minimum liability coverage, which means that their coverage is not enough to pay for the damages they have caused in an accident. That’s why auto insurance companies felt compelled to come up with this type of coverage.

Uninsured motorist coverage is used to cover you in case you are in an accident where you are not at fault but the at-fault driver does not have insurance. It also includes hit-and-run accidents. Underinsured motorist coverage becomes active if the at-fault driver has insurance, but the damages exceeds the amount of their policy’s liability limit.

The uninsured and underinsured motorist coverage can be broken down into two parts:

  • Underinsured and Uninsured Motorist Property Damage
  • Uninsured and Underinsured Motorist Bodily Injury

What’s Uninsured Property Damage Insurance Coverage?

Uninsured property damage insurance is almost the same as collision coverage and it’s used to protect your vehicle against physical damage in case of an auto accident. While the coverage typically comes with a deductible, the insurance company may reimburse you for it and send the at-fault party an invoice.

One of the critical differences between collision coverage and uninsured property damage coverage is how filing a claim is likely to affect your premium. While it may vary depending on the insurance provider. Collision claims are often viewed as at-fault accidents to insurance providers. That means that they can make your premiums increase. Uninsured/underinsured motorist property damage coverage is the result of a not-at-fault accident. Again, this is not consistent across all auto insurance providers, so you can expect to find some discrepancies.

What’s Uninsured Bodily Insurance Coverage?

Uninsured bodily insurance coverage typically kicks in when you sustain physical harm or injury if an uninsured or underinsured driver hits you. This may include medical bills as well as other associated fees. However, unlike property damage coverage, it doesn’t have a deductible.

Stacked Vs. Unstacked Coverage

Stacked insurance increases your uninsured motorist coverage depending on the number of vehicles to be insured. For instance, you have three vehicles that are insured with $15,000 worth of uninsured motorist bodily injury coverage. If an uninsured driver hits you and you have stacked coverage, you could apply all three vehicles’ worth of $15,000 in uninsured motorist bodily injury coverage to get $45,000 in total coverage.

If you decide to stack your coverage, you can expect an increase in the premiums. It is also important to note that this type of coverage is not offered in all states.

Do You Require Uninsured Motorist Coverage?

You are required to carry uninsured motorist coverage in some states. If this type of coverage is not required in your state, you should still consider getting it anyway for the following reasons:

  • There is a high ratio in many states of drivers that drive with no auto insurance.
  • Liability limits for property damage can be very low depending in which state you are in
  • You want to be protected against drivers that are uninsured, underinsured, and hit-and-run drivers.

FAQs

Is Uninsured Motorist Coverage a Requirement?

Statistically, 1 in 7 drivers are currently uninsured. So, there’s a 1-in-7 chance that you could be the one paying for the damages to your vehicle after being involved in an accident caused by an uninsured at-fault driver, either out-of-pocket or through a collision claim. You should consider adding uninsured coverage to your policy if this gives you cause for concern.

Is It Worth It to Get Uninsured Motorist Coverage?

It is a rather tricky question to answer. You need to ask yourself whether or not you are comfortable with taking the risk as well as how confident you are in your ability to pay for damages out-of-pocket in case of an accident.

If you have a luxury vehicle, you might not be willing to risk out-of-pocket payment as a person with an older vehicle. Always think about your financial situation before you make your decision on uninsured motorist coverage.

How Much Uninsured Motorist Coverage is recommended?

Depending on your state and preference, it is advisable to have matching liability limits and uninsured motorist limits. However, experts recommend keeping the liability limits on insurance policies at 100/300.

How Much Does It Cost to Get Uninsured Motorist Insurance Coverage?

The cost of uninsured motorist coverage varies significantly, based on several factors such as limits, vehicle, age, and location.

Uninsured drivers by state

Rank State % of Uninsured Drivers
1 Oklahoma 26%
2 Florida 24%
3 Mississippi 23%
4 New Mexico 22%
5 Michigan 21%
6 Tennessee 20%
7 Alabama 20%
8 Rhode Island 17%
9 Colorado 16%
10 Washington 16%
11 Arkansas 16%
12 Kentucky 16%
13 California 15%
14 Indiana 14%
15 Montana 14%
16 Louisiana 14%
17 Missouri 14%
18 Ohio 14%
19 Illinois 13%
20 Texas 13%
21 Alaska 13%
22 Maryland 12%
23 Nevada 12%
24 Georgia 12%
25 Wisconsin 12%
26 Delaware 12%
27 Minnesota 11%
28 Arizona 11%
29 New Jersey 10%
30 Virginia 10%
31 Iowa 10%
32 Kansas 9%
33 New Hampshire 9%
34 North Carolina 9%
35 Oregon 9%
36 Hawaii 9%
37 Wyoming 9%
38 Vermont 9%
39 West Virginia 8%
40 Connecticut 8%
41 South Dakota 8%
42 South Carolina 8%
43 Idaho 7%
44 Nebraska 7%
45 Pennsylvania 7%
46 North Dakota 6%
47 Utah 6%
48 New York 5%
49 Maine 5%
50 Massachusetts 4%

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