How uninsured/underinsured motorist protection works

How uninsured/underinsured motorist protection works

August 31, 2016
uninsured/underinsured motorist protection
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A lot of drivers have adequate auto insurance, and you probably do too. But what happens in the event of an accident caused by a driver who only has the minimum coverage or no coverage at all? This is where uninsured/underinsured motorist protection comes in handy.

What is uninsured/underinsured motorist protection

According to data from the Insurance Research Council, one in every seven drivers in the United States is currently uninsured. Add to this the number of underinsured American drivers, and you will definitely start to worry every time that you’ll take your car out for a spin. But there’s no need for that. With uninsured/underinsured motorist protection you can make these worries disappear.

Uninsured/underinsured motorist coverage is designed to help pay for the bills that result from a crash caused by another person who carries no auto insurance or only the state’s minimum required limit of liability coverage. This way, you will receive compensation for all damages caused.

What it covers

Uninsured/underinsured motorist protection can refer to three separate but similar coverages:

Uninsured motorist coverage for uninsured motorist bodily injury (UMBI)

UMBI will pay for injuries an uninsured driver causes to people covered by your policy. It can even include family members in other cars and even passengers in your insured cars. UMBi will pay for medical bills, pain and suffering and lost income.

Uninsured motorist coverage for property Damage (UMPD)

UMPD will pay if an uninsured driver damages your car. However, it only works if you can identify the driver who caused the accident, never for a hit-and-run. Be aware! If you purchase both UMPD and collision coverage, UMPD will only cover the deductible. So it may not make sense to purchase it if you already have collision coverage.

Underinsured motorist

This works the same way as UMBI. If the driver who caused the accident carries only the minimum liability insurance and is unable to cover all your damages, you will still receive compensation.

The best part

You may not know this, but it’s relatively inexpensive to add uninsured/underinsured motorist protection to your policy.

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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