What is Uninsured Motorist Protection?

What is Uninsured Motorist Protection

What Is Uninsured Motorist Coverage/Protection?

Imagine you are driving home from a restaurant. While you are going through an intersection, a drunk driver runs a red light and hits your driver side door at 60 miles per hour.   Your pain is immediate and excruciating. Do you have uninsured motorist protection?

You suffer severe damage to your pelvis and need to have your left leg amputated.  You are going to miss months of work, and you are not even sure you are going to be able to return to your old job with a prosthetic left leg.

The other bad news: The driver who hit you had no auto liability insurance coverage, and he has no meaningful assets.

So now what? Uninsured Motorist Coverage – that’s what. Uninsured Motorist Coverage, and it’s fraternal twin sister Underinsured Motorist Coverage are two of the most important coverages you can buy.   These two coverages protect you against harm done to you by others. Uninsured Motorist Coverage is intended to protect you when another motorist negligently injures you with his auto, but he has no insurance and has insufficient assets to compensate you for your damages.

In the above example, your damages are significant, and it is likely that a court would award you $300,000 or more for you medical bills, loss of wages, and pain and suffering. If your damages were $300,000, and you had purchased $300,000 of Uninsured Motorists Coverage, you could potentially collect $300,000 (the limit of liability) from your own insurance policy.

Why Do I Need Uninsured Motorist Coverage?

There are simply too many drivers on America’s roads who do not have insurance, and many of these people do not have the assets to compensate you for your damages, particularly if your injuries are severe.

According to the Insurance Information Institute’s 2012 study, almost 13% of the drivers on the road have no auto insurance.   And, in some states, as much as 25% of the drivers on the road have no auto insurance.

 What Is The Most I Can Collect From My Insurance Company Under My Uninsured Motorist Coverage?

The limits for Uninsured Motorist Coverage can either be structured with just a single per accident limit or with a per person limit and a maximum per accident aggregate limit. Beyond the limits of insurance, how much you may be able to collect depends upon your insurer’s policy wording, the circumstances of the loss, the amount of damages, and the assets that the party who hit you may have to compensate you for your damages.

Example 1: The other driver was 100% at fault and caused injuries to you.   Your damages are $750,000.   You purchased $500,000 of Uninsured Motorists Coverage, and the negligent driver had no insurance. Your damages exceed the limit of insurance that you purchased for the Uninsured Motorist Coverage. So, the most you could collect from your insurer would be $500,000 (the limit).   This leaves you short $250,000 unless the other driver had assets that can be transferred to you.

Example 2: The other driver was 100% at fault and caused injuries to you.   Your damages are $750,000.   You purchased $500,000 of Uninsured Motorists Coverage.   The driver had insurance, but his auto liability limit was only $50,000. His policy will pay you the $50,000.   If he has assets, the court might also order him to turn some of them over to you. As the other driver had insurance, your Uninsured Motorists Coverage does not respond.   In this case, you need Underinsured Motorist Coverage in order to be properly protected.

Example 3: The other driver was 100% at fault and caused injuries to you.   Your damages are $750,000.   You purchased $500,000 of Uninsured Motorists Coverage, and the negligent driver had no insurance. However, the party who hit you does have some money.   She agrees to give you $500,000 cash for your damages, which is $250,000 too little.   In this case, your insurer will bay you $250,000, which is the amount of your damages minus the amount that the negligent driver agreed to pay you out of her assets.

How much Uninsured Motorist Limit can I buy?

First of all, your insurer will not let you buy more than the auto liability limit that you purchase.   If you purchase a $100,000 limit for automobile bodily injury liability, your insurer will not let you purchase a higher limit than that for Uninsured Motorists Coverage. If the highest limit your insurer will sell for auto liability if $300,000, then that is likely the highest limit you can get from them on Uninsured Motorists Coverage.

However, you may be able to purchase even more limit on an umbrella policy.   You may be able to purchase an umbrella policy from either your insurer or another company that is willing to issue a mono-line umbrella policy.   That insurer may be willing to include coverage for Uninsured Motorists, providing you with still more limit.

Can I purchase Uninsured Motorist Coverage without buying Underinsured Motorists Coverage?

It will vary by state and by insurer. These two coverages are sometimes sold separately and are sometimes bundled together.   It is generally recommended that, where available, you buy them together. In some states, it is mandatory to offer them together.   In these states, when you purchase Uninsured Motorist coverage, you automatically also get Underinsured Motorist coverage.

How Much Uninsured Motorist Coverage Should I Buy?

As mentioned earlier, Uninsured Motorist Coverage and Underinsured Motorist Coverage protect you. Some pretty horrible things can happen in a car accident. You might end up needing a lifetime of skilled nursing services as a result of a serious car accident.   You will need to decide how much is enough when you consider the medical care, lost wages, and pain and suffering. Normally you should consider limits that at least match your liability limits.

Who Does Uninsured Motorist Coverage Apply To?

If you purchase the coverage, it generally protects not only you, but also your passengers and permissive users of your car.

This short article provides a quick summary of Uninsured Motorist Coverage.   How the coverage would actually respond depends on many factors, including which state the loss takes place in, the policy wording, and the individual circumstances.   Read your policy carefully. Should you have questions, seek the advice of a professional insurance agent or an attorney.   The examples used in this article only included injuries to one person.   When multiple people are injured, the examples can become much more complex.

Other Enhanced Insurance articles related to Car Insurance Coverage:

What Is a Car Insurance Deductible

What Is Personal Injury Protection Coverage

What Is Medical Payments Coverage

What Is Underinsured Motorist Protection

What Is Rental Car Insurance Coverage

What Is GAP Coverage?

How Much Is GAP Insurance?

Collision Insurance Coverage

Property Damage Coverage

Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.

Jim Ketterson is an insurance expert with more than 25 years of experience in the industry. He has served as a President of an insurance company, an insurance underwriter, and has held various roles in insurance company product management. He has his Chartered Property Casualty Underwriter designation and a MBA in Finance. The information he offers in his posts is general in nature and may not be appropriate, accurate, or applicable in all situations. Before making any important insurance decisions, you should seek the advice of a qualified insurance agent and discuss the particulars of your individual situation. Follow Jim on Twitter @MNinsurancePro

One comment on “What is Uninsured Motorist Protection?

  1. Honestly, if you are injured badly enough to receive a policy limits offer from the at-fault insurance company, the door is wide open for a UIM claim up to the full policy limit, and your insurance company does not want to pay it. My experience is that you want to get an attorney who knows the ins and outs of negotiating personal injury claims and pay them to do the work for you. The other option is to take it on yourself, in which case you run a higher risk of losing your claim.

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