What does uninsured/underinsured coverage pay for?
Uninsured/underinsured motorist coverage (UM/UIM) generally includes two parts: bodily injury and property damage. Depending on what state you live in, this coverage can help pay for:
- Damage to your vehicle
- Medical treatment for you and your passengers
- Lost wages
- Funeral expenses
What happens if an uninsured driver hits me?
Normally, when you're in an accident, and another driver is at fault, the other driver's auto insurance company pays for the damage to your vehicle and medical bills if you're injured. But if the other driver doesn't have insurance, there's no insurer to cover the cost.
That's where uninsured motorist coverage (UM) comes in. If your auto insurance policy includes uninsured motorist coverage, you can file a claim with your insurer that may cover the incident — up to your policy's limit.
What happens if an underinsured driver hits me?
In this case, the other driver's auto insurer may pay some of your medical expenses and property damage — but only up to the driver's policy limit.
If you have underinsured motorist coverage (UIM), you can file a claim with your insurer to cover the rest. Your insurance company may pay the remaining amount, up to your policy limit.
Important note: UM/UIM coverage for property damage may include a deductible in some states.
What if I don't have uninsured/underinsured motorist coverage?
Depending on where you live, you may be required to carry uninsured/underinsured motorist coverage. But if you live in a state where coverage is optional and choose not to purchase it, you may be putting yourself at risk.
While nearly every state requires drivers to have auto insurance, that doesn't mean everyone complies with the law. According to the Insurance Information Institute, nearly 13% of drivers countrywide don't have auto insurance. And those who do have insurance may not have enough to pay for damage or injuries they cause.
If an uninsured/underinsured driver hits you and you don't have uninsured/underinsured motorist coverage, you could be responsible for covering accident-related expenses out of your own pocket.