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When it comes to buying auto insurance, there are several different types of coverage that make up your policy. Some are legally required by your state and some aren’t, and it can be confusing to understand which kinds of car insurance you really need and which you can do without.
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Uninsured motorist insurance, also called uninsured motorist/underinsured motorist coverage and often shortened to UM/UIM, is required in some states and is optional in others, but it should be a serious coverage consideration for everyone buying car insurance.
Uninsured/underinsured motorist coverage generally only adds a few dollars to your monthly premium but the amount of coverage it gives you can be essential in the event of an accident.
When another driver causes an accident but doesn’t have insurance to pay for it, uninsured/underinsured motorist insurance (UM/UIM) will cover the costs for any bodily injuries or property damage you sustain
There are two categories of UM/UIM coverage: Uninsured motorist bodily injury coverage and uninsured motorist property damage coverage
UM/UIM insurance is optional in most states, but a minimum amount is required by law in states like Connecticut, Virginia, and New York
Uninsured motorist coverage protects you financially if you’re in an accident with an uninsured motorist. Underinsured motorist coverage, which is sometimes combined and sometimes offered separately, protects you financially when you’re in an accident with a motorist whose insurance limits aren’t high enough to pay for the extent of the damage they’ve caused. Uninsured/underinsured motorist coverage is required in some states, including Connecticut, Maryland, Massachusetts, Minnesota, Nevada, New York, Oregon and South Carolina, among others.
There are two categories of uninsured/underinsured motorist coverage: Uninsured motorist bodily injury coverage and uninsured motorist property damage coverage.
UMBI can cover the costs if you get hurt in an accident involving an uninsured or underinsured driver. It can also pay for injuries to you or your passengers under the following circumstances:
When an uninsured driver is deemed at-fault
If you’re the victim of a hit-and-run driver
If you’re hit by an uninsured driver while riding a bike or walking
This coverage includes medical expenses and lost wages; it may even pay for rehabilitation or funeral costs, if you or a passenger die in an accident.
UMPD pays for damages when your car or other property is hit by an uninsured driver. Normally, the costs of repairing your car after another driver hits you would be covered by their liability insurance, but if the other driver is uninsured, you’ll need uninsured motorist coverage or be stuck paying for the damage yourself.
Not all states and insurance companies offer both types of coverage. UMBI is the more important of the two, since you likely have other types of insurance that will protect you from injury. UMPD is often referred to simply as “uninsured motorist insurance.”
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Uninsured motorist coverage can have some overlap with other coverage types under your auto policy or other insurance policies you may have, like health or disability insurance. In each instance, uninsured motorist insurance can offer more robust and additional coverage, but it’s good to understand how the coverages compare to one another.
Below are the coverage components that make up what is called a “full coverage” auto insurance policy:
|COVERAGE TYPE||WHAT IT DOES|
|Bodily injury liability||The part of your liability coverage that pays for medical bills if you've injured someone in an accident|
|Property damage liability||The other part of liability coverage, covers the cost of property damage you've caused in an accident|
|Personal injury protection||Covers medical expenses for you or your passengers after an accident|
|Uninsured/underinsured motorist||Covers the costs if you're in an accident caused by a driver with little or no car insurance|
|Comprehensive||Covers damage to your car that happens when you're not driving|
|Collision||Covers damage to your car after a car accident, no matter who was at fault|
Uninsured motorist coverage pays for medical bills if you’re injured by an uninsured driver, but there is another type of auto insurance coverage that may also pay your medical bills in that situation: personal injury protection (PIP).
PIP is another type of car insurance coverage that is optional in some states and required in what are called “no-fault” states. PIP coverage pays for your medical bills (and those of your passengers) if you get into an accident, no matter who is at fault. If you have PIP coverage, it would cover you if you are injured by an uninsured driver, but PIP coverage limits are usually low. Uninsured motorist coverage would pay your medical and other expenses after your PIP limits are met.
Your coverage limit is the maximum amount your insurance company will reimburse you. For example, if you have $10,000 in PIP coverage and your accident results in $15,000 worth of medical expenses, your insurance will reimburse you the $10,000 and the remaining $5,000 you’d have to pay out of pocket. If you have uninsured motorist liability coverage, it could kick in to pay the remaining $5,000.
PIP and UM can also both pay for lost wages if you’re injured in an accident. Though again, PIP limits are generally lower than the coverage offered by uninsured motorist insurance.
If you’re injured in a car accident, your health insurance will pay for your related bills, up to your limits and minus your deductible and coinsurance costs. That's true whether the accident was your fault or not, so if you have good healthcare coverage, and know that any regular passengers of your vehicle do as well, you may feel comfortable forgoing uninsured motorist coverage.
If you can’t work because of an injury, illness, or disability, your disability insurance can pay you roughly the same amount (typically 80%) of your paycheck while you recover. Many people have short-term disability coverage through their employers and you can also purchase long-term disability insurance independently.
If you’re seriously injured in a car accident and unable to work, disability insurance may cover a portion of your lost wages after a waiting period, however UIM could be able to cover you before disability insurance kicks in (usually after 90 days, for short-term disability policies). Both types of insurance cover lost wages due to injury from a car accident, however UIM does not require a waiting period.
Uninsured motorist property damage pays for damage to your car after an accident with an uninsured driver; collision coverage pays for damage to your car when it's in an accident no matter who is at fault.
Many people choose between uninsured motorist property damage coverage and collision coverage when buying insurance. But if you have collision coverage, you may not need UMPD.
Collision coverage is more robust than UMPD — for example, if you crash your own car into a tree or get in an accident where you’re at fault, collision coverage would still pay for the damage to your car, while uninsured motorist property damage only pays if the uninsured driver is at fault.
The main reasons to buy uninsured motorist coverage are because it’s required, either by law for your vehicle lease or finance company, and because it offers you more protection if you’re hit by an uninsured motorist than any other component of car insurance coverage can offer. Here’s who should get uninsured/underinsured motorist coverage:
Some drivers need uninsured motorist coverage because it’s required by law. Auto insurance is required in almost every state, but the types and amounts of insurance required vary. Bodily injury liability coverage is the most commonly required insurance, but nearly half of states also require uninsured/underinsured motorist coverage.
The most common amounts of uninsured/underinsured motorist coverage required by states that mandate it are $25,000 per person and $50,000 per accident, the same as most states’ liability coverage limits. But as with all state car insurance required amounts, these minimums may be too low for most people and could leave you open to risk.
➞ Learn your state’s auto insurance requirements, including the minimum required amounts for uninsured/underinsured motorist coverage.
Many leasing and financing agencies, including dealerships and banks, require that your insurance policy include uninsured/underinsured motorist coverage. When you lease or finance a car, there is another party who has an interest in protecting the vehicle, so your lessor or lender will lay out certain requirements for the car insurance coverage you purchase, typically including some amount of uninsured/underinsured motorist coverage.
Even if uninsured motorist insurance is not required in your state, you may decide you want uninsured motorist coverage to reduce your own risk. (Most experts recommend it.)
About 13% of drivers in the United States are uninsured, according to the Insurance Information Institute, and in some states, that number creeps up to 20% (Tennessee and Michigan), 21% (New Mexico), 24% (Mississippi), and 28% (Florida).
If you get hit by one of these drivers and sustain injuries or damage to your vehicle, you could be the one who has to pay the price — even if the collision wasn’t your fault. (That’s not to mention the drivers who are underinsured and may not have enough coverage to pay for extensive damages or injuries.)
Logan Sachon is the co-founder of The Billfold, a groundbreaking personal finance site for millennials that was named one of Time's 25 Best Blogs of 2012. Her work has been published in New York Magazine, Glamour, The Guardian, BuzzFeed and more.
Kara McGinley is an insurance editor at Policygenius, specializing in home, auto and renters insurance. She previously worked as a freelance writer and copywriter, and has been writing about insurance since 2019. Kara is an expert at making complicated topics like property insurance simple to understand. Her work can be found in Teen Vogue, The Culture Crush, and more.
Kara has a B.A. in English from East Carolina University.
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