Uninsured Motorist Coverage

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Almost every state requires drivers to carry liability insurance. That way, if they injure someone or damage property while behind the wheel, their policy can cover the costs.

Still, a significant number of people drive around without the legally required liability insurance. The Insurance Information Institute (III) reports that as many as one in eight drivers on the road today are uninsured.

So what happens if you’re not at fault in an accident and the other driver doesn’t have insurance? In this case, you will need uninsured motorist coverage.

What is uninsured motorist coverage?

Uninsured motorist coverage is a type of car insurance that protects you if you are involved in an accident where the at-fault party does not have insurance; they are an uninsured motorist. Without this type of insurance, you’d be stuck paying out of pocket for any injury or damage that resulted from the accident.

Say, for example, you are rear-ended while driving and are clearly not at-fault in the accident. You get out of your vehicle to exchange information with the other driver, only to find they do not have any insurance at all. Because you cannot call on their policy to cover the damages they caused, you could be left financially compromised. But with uninsured motorist coverage, you can turn to your own policy for repairs to your vehicle (up to your policy limits).

In some states, uninsured motorist coverage can also step in if you’re the victim of a hit-and-run.

Types of uninsured motorist coverage

If you live in a state that requires liability coverage, that includes two different types: coverage for any injuries you cause and coverage for property damage you cause. Uninsured motorist coverage works similarly:

Uninsured motorist bodily injury (UMBI) coverage

This covers costs if you or any of your passengers are injured in an accident with an uninsured driver. In addition to covering any hospital and doctor’s bills (up to your policy limits), some UMBI will also cover lost wages if your injuries leave you unable to work for a period of time.

Uninsured motorist property damage (UMPD) coverage

This is the portion of your uninsured motorist coverage that will help to repair your vehicle or replace it (up to your policy limits) after an accident with an uninsured driver.

What is the difference between uninsured and underinsured motorist coverage?

  • Uninsured motorist coverage is insurance specifically to protect you from injury or damage caused by an entirely uninsured motorist.
  • Underinsured motorist coverage is a similar type of insurance that protects you if the other driver has insurance but it’s not enough to cover the full amount of damage and expenses. Your underinsured motorist policy will pay up to a set amount above the other driver’s policy limit.

What is the difference between uninsured motorist bodily injury coverage (UMBI) and uninsured motorist property damage coverage (UMPD)?

  • Uninsured motorist bodily injury coverage, or UMBI, covers the medical expenses, lost wages and related costs for you and your passengers in an accident caused by an uninsured motorist or a hit-and-run accident in some states (in others, you might use your personal injury protection (PIP) here).
  • Uninsured motorist property damage coverage, or UMPD, refers to coverage for damage to your car caused by an uninsured motorist or a hit-and-run accident in some states (in others, you will use your collision coverage after a hit-and-run).

Do I need uninsured motorist coverage?

Even if your state doesn’t require you to have uninsured motorist coverage, it is almost always recommended to have it. Here are a few reasons why you might need uninsured motorist coverage or underinsured motorist coverage:

  • Nearly half of states require their resident drivers to have some form of uninsured or underinsured motorist coverage. You can ask your insurance provider to see what the minimum requirements are, or you can check for yourself. To do so, head to the Insurance Information Institute’s (III) uninsured motorist page. Scroll down to the table called “Automobile Financial Responsibility Limits By State” (about halfway down the page). If your state has UM listed by it, you’re required to carry uninsured motorist coverage.
  • If you’re in an accident, the chance of the other driver being an uninsured motorist or underinsured motorist is higher than you might think. The III estimates nearly 13% of drivers are currently uninsured – which is one out of every eight people on the road. In some states, this number is even higher; it’s nearly 27% in Florida — with the most uninsured drivers of all states. The other states rounding out the top five are Mississipi, New Mexico, Michigan and Tennessee. In all of these states, at least one in five drivers is uninsured.
  • If you’re leasing or financing your vehicle, your financial institution may require you to have uninsured motorist coverage.

How much does uninsured motorist coverage cost?

The cost of uninsured motorist coverage depends on several factors, such as your state and type of vehicle. That said, the cost is typically fairly low-impact. Hanover, for example, indicates it can cost as little as $67 for a year of coverage.

Compare policies from a few car insurance companies to figure out how much you’ll pay for this important protection.

Frequently asked questions

Do I need both uninsured motorist coverage and underinsured motorist coverage?

Depending on your local requirements and personal needs, you might just need one type of coverage or you may need both.

What happens if the damage and expenses in an accident exceed the at-fault driver’s policy limit?

Any damage and expenses above the limit of the at-fault driver’s policy roll over to other driver’s underinsured motorist coverage up to the limit of that policy.

What is the limit of an uninsured or underinsured motorist policy?

Uninsured and underinsured motorist policies come in a wide range of coverage options, depending on the carrier and state. This can be anywhere from a few thousand dollars to over a million dollars.