Personal Injury Attorney
What Is UM/UIM Coverage?
Uninsured (UM) motorist and underinsured (UIM) motorist coverage is an additional amount of auto insurance available for you to purchase on your own automobile policy to protect you in case of an accident where the at-fault driver does not have enough coverage to pay your expenses. Some state laws only require that drivers have minimum liability coverage. UM/UIM coverage can provide critical protection for you and your family if you are injured in a collision involving any of the following:
- A driver with no insurance at all
- A driver with only the minimum insurance requirement
- A hit-and-run driver where the at-fault driver leaves the scene and cannot be identified
For bodily injury, the minimum requirement in some states is as little as $25,000 per person and $50,000 per collision. For property damage, some minimums are $25,000 per collision. If you are involved in a collision that isn’t your fault, and the other driver only has these minimum limits, you may be at risk of having to pay out of pocket.
Why You Need UM/UIM Coverage
This is where purchasing UM/UIM coverage is very important. Let’s take a look at a quick example. Let’s say your friend Bob was T-boned in an intersection when another driver ran a red light. Unfortunately for Bob, the driver only had the minimum insurance limits, but Bob was very seriously injured. After a lengthy hospital stay with a concussion, several broken bones, and physical therapy, the driver’s $25,000 policy is not going to come close to covering Bob’s medical expenses, so he will be left to pay the remainder out of his own pocket. If his total bill comes to $100,000, that could leave him to pay a staggering $75,000! It’s a scary example, and remember, Bob was not at fault for any of his injuries.
Types of Coverage Available
Now that you see why purchasing this additional insurance could be so vital, let’s discuss the types of coverage from which you can choose.
- Stacked auto insurance increases your uninsured motorist (UM) and underinsured motorist coverage (UIM) depending on the number of vehicles you own.
- Unstacked insurance means that your UM and UIM coverage limits for multiple vehicles are not combined. Premiums for unstacked insurance may be lower than premiums for stacked coverage. That’s because stacking coverage increases the overall limit, or the amount that your insurer might have to pay toward a covered claim.
- Reduced-by coverage pays you the difference between what the at-fault driver’s insurance policy pays and your insurance coverage. For example, if you have $100,000 in underinsured coverage and the other driver has $25,000, you will have $75,000 available under your own policy.
- Add-on insurance coverage will pay you on top of the amount the at-fault driver’s company pays. This is the best choice for UM/UIM coverage. This means that in the example listed above, you would potentially have $125,000 available to you rather than $75,000. You are required to decline this type of coverage in writing if you chose to go with the cheaper reduced-by coverage option.
- Medical Payments coverage is another option. In addition to the standard limits on your insurance policy, you can also opt for additional medical payments coverage if your lower limits do not suffice.
Of course, these options all come with a premium to pay, so do your research, talk with your insurance agent, and choose your options wisely. It will help you be prepared for an unforeseen catastrophe. If you are injured as the result of someone else’s negligence, contact a personal injury attorney who can file a claim on your behalf and help you navigate the road to recovery.