The JRC Blog

What Is Uninsured and Underinsured Motorist Insurance?

Did you know that 1 out of 7 drivers in the United States are currently uninsured?

This leaves you, a responsible auto insurance-carrying citizen, in jeopardy. Unfortunately, if you are injured or your car is damaged in an auto accident with an uninsured motorist (a driver who does not have auto insurance), you will not be able to file a claim and will be stuck with the bills yourself. The only other option besides forking over your own money for the injuries or damages is to try to collect from the driver yourself or file a lawsuit. Both of these options are time consuming, frustrating, and do not guarantee any payment.

The best way to protect yourself against this type of situation is to carry a Uninsured and/or Underinsured Motorist Insurance policy.

What is Uninsured and Underinsured Motorist Insurance?

Uninsured Motorist Insurance is coverage that protects you if you are involved in an auto accident with a driver who does not have auto insurance. Underinsured Motorist Insurance protects you when the other driver’s insurance coverage is not sufficient to cover the damages. Although it is required by law for every driver to carry auto insurance, thousands of Americans choose to drive uninsured. You never know when you might be rear ended by someone who does not have insurance.

What are the different types of UM coverage?

There are four types of uninsured motorist insurance and depending on the state they are either mandatory or optional. Sometimes these coverages will come in a bundle while other times they must be purchased separately.

• Uninsured/Underinsured Motorist Bodily Injury Insurance (UM or UMBI) – This covers medical bills, lost wages, pain and suffering if caused by an uninsured/underinsured motorist
• Uninsured/Underinsured Motorist Property Damage Insurance (UMPD) – This covers the damage to vehicle but may not be available in all states. In some cases it may cover a hit-and-run.

Who Needs Uninsured Motorist Insurance?

We suggest that anyone who drives carries a UM policy on their auto insurance plan. In certain states, it is mandatory to carry this type of coverage, but in others it is option. Because nearly 15% of drivers are uninsured or underinsured, we recommend that every driver have UM coverage, whether it is required or not.

What are the limits for UMBI/UMPD?

When you decide to purchase a UMBI/UMPD policy your insurance company will ask you to choose the limits on your plan. A limit is the highest amount your insurance will pay you should you file a claim.

In most cases, UM coverage will have split limits. This means that the coverage will be different if there is one person involved or multiple people involved on the claim. For example, in a $15,000/$30,000 split limit, $15,000 would be the most your insurance would pay if you were injured or $30,000 would be the most they would pay if the other passengers were also injured.

The other option for coverage is called a Combined Single Limit and covers everyone in the car with one lump sum. For example, if you chose a combined single limit of $30,000, that would be the maximum amount your insurance pays you for all injuries sustained in the accident.

Do I need to get Uninsured or Underinsured Motorist Insurance?

Given the statistics of how many uninsured and underinsured drivers there are on the road these days, we suggest you take every precaution possible to avoid being left with outrageous bills in the case of an accident. It’s not fair to be stuck paying for damages you didn’t cause just because the other driver was not responsible enough to purchase auto insurance. However, it does happen and that’s why we advise every driver carry a UMBI and UMPD policy if possible.