If you’re hit by a driver who doesn’t have car insurance, you may find yourself in an unenviable situation. You’ll have to pay any expenses out of your pocket and then rely on the justice system to get your money back.
However, suing somebody is a lengthy process. Furthermore, it happens often that the uninsured driver doesn’t have enough money to cover the damages. So, you can add uninsured motorist coverage to your policy to avoid all that.
However, if you plan to buy this coverage or already have it, there’s a multitude of insurance technicalities you should be aware of. Here you will find all those details explained as plainly as possible.
Additionally, you’ll discover how much this protection plan costs and how to get the most out of it.
What Is UM Coverage?
It’s a type of insurance that pays the expenses an uninsured at-fault driver cannot cover. Namely, it’s mandatory in some states and optional in others. Underinsured or uninsured motorist coverage, depending on the definition, may be one of the following three coverages:
- Uninsured Motorist Property Damage Coverage (UMPD) – This coverage pays for the property damage inflicted by an at-fault driver without insurance. It is not available in all US states.
- Underinsured Motorist Insurance (UIM or underinsured motorist bodily injury reimbursement) – This protection plan pays the injury-related costs that the at-fault driver without sufficient insurance inflicted on others.
- Uninsured Motorist Insurance (UM or UMBI) – This coverage pays for the medical expenses that the uninsured at-fault driver is responsible for.
Moreover, in some states, these three coverages are bundled together and represent one coverage, but in other states, they are separate coverages.
What’s Covered by Uninsured Driver Insurance
Uninsured and underinsured motorist coverages pay for your and your passengers’ medical expenses. They also protect you in a hit-and-run accident.
They may even cover lost wages and pain and suffering. You’ll receive payment only if the uninsured driver is at fault. Additionally, you must make a claim against your insurance company.
Uninsured motorist property damage coverage pays for the damage inflicted upon your vehicle by a driver without insurance. In fact, that’s one of the primary differences when comparing uninsured motorist coverage vs. collision.
That said, collision covers any damage to your car that results from a collision with another vehicle or object, no matter whose fault it is.
Furthermore, uninsured coverage may cover personal property like cellphones, tablets, watches, and similar items in some states. It works the same as uninsured motorist protection in all other aspects, meaning it protects you against hit-and-run drivers.
How Does Uninsured Motorist Coverage Form Work?
Like all insurance coverages, this one also has a limit — the maximum amount your insurance company will pay. Furthermore, for medical expenses, you can choose between the split and the combined limits.
An example of the split limit would be $30,000/$60,000. The first number is the maximum payout per person, while the second is per accident. Alternatively, you can choose a combined limit — the maximum payout per accident, regardless of the number of people involved.
For property damage, there’s no such difference, meaning there’s a single number that is the highest amount your insurance company would pay. In some states, this coverage carries a deductible, which you would pay out of your pocket.
How Does Underinsured Motorist Coverage Work?
Generally speaking, for underinsured motorist protection, things are a little bit more complicated. As AllLaw’s guide on insurance law notes, this coverage pays only the difference between your limits and the at-fault driver’s insurance.
For example, if the total damage was $250,000, the limits of the guilty driver were $150,000, and your limits for underinsured coverage were $200,000, then you would receive a $50,000 settlement from your own insurer.
Example:
Total Damage Suffered: $250,000
At-Fault Driver’s Insurance: $150,000
Underinsured Coverage Limits: $200,000
Your Payment from Insurance Company: $200,000-$150,000 = $50,000
Payment out of Your Pocket: $50,000
Uninsured vs. Underinsured Coverage: Important Facts
Insurance companies don’t allow uninsured or underinsured motorist coverage to exceed your liability limits.
In fact, this is just a business decision for them since these two coverages are relatively cheap compared to liability insurance. Moreover, they don’t want to end up with a customer purchasing minimum liability and then getting high uninsured/underinsured coverage limits.
Another vital thing to remember is that many insurers set a deadline for making an uninsured motorist claim. In fact, this means you should notify your insurer you intend to make a claim as soon as possible.
This is especially important because it takes longer to develop this kind of claim. However, you’ll only know the entire situation after receiving the bill for your medical treatment.
It’s also good to know that this coverage follows a driver, meaning that it protects you when you’re driving your car, a rented vehicle, or one borrowed from a friend. Uninsured motorist coverage will even apply if you’re a passenger or using public transport.
Where Is Uninsured/Underinsured Motorist Coverage Mandatory?
Some states may require one, two, or all three types of uninsured or underinsured coverages. So, if multiple coverages are mandatory, insurance companies often bundle them in one package.
Therefore, check the complete list below for information on laws in each US state that requires some form of this coverage.
| State | Mandatory Uninsured Motorist Bodily Injury Coverage | Mandatory Uninsured Motorist Property Damage Coverage | Mandatory Underinsured Motorist Bodily Injury Coverage |
| CONNECTICUT | Y | Y | |
| DISTRICT OF COLUMBIA | Y | Y | |
| ILLINOIS | Y | Y | |
| KANSAS | Y | Y | |
| MAINE | Y | Y | |
| MARYLAND | Y | Y | Y |
| MASSACHUSETTS | Y | ||
| MINNESOTA | Y | Y | |
| MISSOURI | Y | ||
| NEBRASKA | Y | Y | |
| NEW JERSEY | Y | Y | Y |
| NEW HAMPSHIRE* | Y | Y | Y |
| NEW YORK | Y | Y | |
| NORTH CAROLINA | Y | Y | Y |
| NORTH DAKOTA | Y | Y | |
| OREGON | Y | Y | |
| RHODE ISLAND* | Y | Y | Y |
| SOUTH CAROLINA | Y | Y | |
| SOUTH DAKOTA | Y | Y | |
| VERMONT | Y | Y | Y |
| VIRGINIA* | Y | Y | Y |
| WEST VIRGINIA | Y | Y | |
| WISCONSIN | Y |
* In Rhode Island, uninsured motorist coverage isn’t mandatory if you carry the minimum limits required from the state for bodily injury liability coverage.
If you buy higher car liability limits, you have to also buy uninsured motorist bodily injury insurance. In addition, uninsured motorist includes property damage coverage.
* In New Hampshire, car insurance isn’t mandatory. But, if you buy insurance, then you should know that uninsured motorist bodily injury insurance is compulsory and also includes underinsured motorist bodily injury coverage.
* In Virginia, drivers don’t need car insurance if they prove they can pay for accident losses. Then again, if you buy insurance, you have to have underinsured motorist and uninsured motorist (including bodily injury and property damage) coverage.
Who Needs Uninsured Motorist Coverage?
If you are not based in one of the states requiring some form of uninsured/underinsured coverage, you might wonder whether it is worth adding to your policy.
Many drivers on the road do not have mandatory liability insurance, and even more hit the roads with insufficient liability limits.
Given this, coupled with the relatively low cost of uninsured motorist coverage, we would recommend that anyone add this coverage to their plan if they can afford it.
However, if you are working on a tight budget and want to include only what’s necessary, you may want to drop this coverage. The best way to decide is to check the percentage of uninsured drivers in your home state.
For example, uninsured motorist coverage in Colorado or similar states may not be worth it because the number of drivers without car insurance isn’t high enough.
Below is the list of states with the highest and the lowest percentages of uninsured drivers.
| Rank | State | Percent Uninsured | Rank | State | Percent Uninsured |
| 1. | Mississippi | 29.4% | 27. | Iowa | 11.3% |
| 2. | Michigan | 25.5% | 28. | Kansas | 10.9% |
| 3. | Tennessee | 23.7% | 29. | South Carolina | 10.9% |
| 4. | New Mexico | 21.8% | 30. | Oregon | 10.7% |
| 5. | Washington | 21.7% | 31. | Virginia | 10.5% |
| 6. | Florida | 20.4% | 32. | Nevada | 10.4% |
| 7. | Alabama | 19.5% | 33. | Minnesota | 9.9% |
| 8. | Arkansas | 19.3% | 34. | Hawaii | 9.3% |
| 9. | District of Columbia | 19.1% | 35. | Nebraska | 9.3% |
| 10. | California | 16.6% | 36. | West Virginia | 9.2% |
| 11. | Rhode Island | 16.5% | 37. | Vermont | 8.8% |
| 12. | Missouri | 16.4% | 38. | Montana | 8.5% |
| 13. | Colorado | 16.3% | 39. | Delaware | 8.5% |
| 14. | Alaska | 16.1% | 40. | Texas | 8.3% |
| 15. | Indiana | 15.8% | 41. | South Dakota | 7.4% |
| 16. | Maryland | 14.1% | 42. | North Carolina | 7.4% |
| 17. | Kentucky | 13.9% | 43. | Utah | 6.5% |
| 18. | Oklahoma | 13.4% | 44. | Connecticut | 6.3% |
| 19. | Wisconsin | 13.3% | 45. | New Hampshire | 6.1% |
| 20. | Idaho | 13.2% | 46. | Pennsylvania | 6% |
| 21. | Ohio | 13% | 47. | Wyoming | 5.8% |
| 22. | North Dakota | 13% | 48. | Maine | 4.9% |
| 23. | Georgia | 12.4% | 49. | New York | 4.1% |
| 24. | Arizona | 11.8% | 50. | Massachusetts | 3.5% |
| 25. | Illinois | 11.8% | 51. | New Jersey | 3.1% |
| 26. | Louisiana | 11.7% |
As we can see, Mississippi has the highest percentage of uninsured drivers.
Another critical factor to consider is the minimum insurance in your home state. If it has low minimum limits, like Florida, getting uninsured motorist coverage looks like a wise investment. Also, if your vehicle is an expensive model, adding this coverage makes even more sense.
What’s the Cost of Uninsured Motorist Coverage?
In general, uninsured/underinsured coverage is one of the cheapest coverages. However, the cost depends on a few factors, like the limits, state laws, type of vehicle, and percentage of uninsured drivers in the state. Overall, it can cost as little as $5–$10 per month.
Again, if you can afford this insurance, we advise you to purchase it to be on the safe side. It doesn’t cost as much as other coverages and saves you from ending up in a stressful financial situation.
Shopping Tips for Uninsured Motorist Coverage
Given the low price of this protection plan, we wouldn’t base our choice of an insurance company on it alone. But keep in mind that negotiating and shopping around just for the sake of this coverage would save approximately $30 annually.
Of course, getting an affordable insurer should not imply sacrificing quality. Still, saving up to a few thousand dollars annually is possible when you factor in the entire monthly premium, including uninsured motorist coverage.
To get the finest insurance, we’d first determine the right uninsured motorist coverage deductible and the limits we want in our policy.
After that, we would check out the best auto insurance reviews to learn more about each major insurer in the US. We would focus primarily on the quality of customer service, but we’d also take financial strength and the number of discounts and optional coverages into account.
Once we’ve studied the reviews, we’d include up to eight best companies in terms of uninsured motorist coverage and get a quote from all of them.
It’s pretty easy to customize your uninsured/underinsured motorist coverage, and completing an online quote doesn’t take more than 15 minutes. Of course, some companies don’t make it easy to obtain an online quote.
However, even if you have to call your local insurance agency a few times, the whole process shouldn’t take more than one afternoon. So, it’s a small price to pay for getting the best auto insurance at the lowest price.
Conclusion
Uninsured motorist coverage is an inexpensive addition to your car insurance policy, and it can quite come in handy if a driver without insurance crashes into you.
Moreover, it’s sometimes bundled with an underinsured protection plan or uninsured coverage for property damage. Given its low price, we recommend this coverage to all drivers who can afford it.
In addition, the coverage price is low enough not to justify changing insurers just to get a discount. Nonetheless, if you’re adding expensive protection plans like Personal Injury Protection, you can save a lot by exploring the market.
People Also Ask
Do I really need uninsured motorist coverage?
Many drivers don’t have mandatory liability insurance, and even more only have the minimum limits. If such a driver hits you, you will likely end up paying out of your pocket for medical expenses and property damage.
So, in order to avoid such situations, it’s wise to add underinsured and uninsured coverage to your policy. In addition, it’s pretty cheap too.
Why would you reject uninsured motorist coverage?
We have already mentioned that paying for uninsured motorist coverage is a typically affordable way of adding additional protection.
However, in case you already have collision, and some kind of medical coverage, rejecting uninsured motorist insurance is a good way to lower your premium. As a matter of fact, a lot of people reject this coverage when buying car insurance.
How does underinsured motorist coverage work?
This coverage protects you if you’ve had a crash with an at-fault driver who has liability limits that are too low to pay for the medical expenses of injured people.
Let’s give an example of this — if the total damage was $250,000, the limits of the guilty driver were $150,000, and your limits for underinsured coverage were $200,000, then you would receive a $50,000 settlement from your own insurer.
Is it better to have collision or uninsured motorist?
Namely, uninsured motorist coverage is a type of insurance that pays the expenses an uninsured at-fault driver cannot cover. However, as mentioned, uninsured motorist coverage only applies if uninsured drivers are at fault.
At the same time, collision insurance covers damage to your vehicle and pays out no matter whose fault the accident was. It can be used to replace or repair the policyholder’s car after a crash.
All in all, it’s better to have collision coverage since it applies in more situations.
