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Understanding Coverage: Part 3 – Uninsured and Underinsured Motorist Coverage

What happens when you or others in your car are injured in a crash caused by a driver who either has no insurance or doesn’t have enough? Fortunately, uninsured and underinsured motorist coverage can protect you financially from irresponsible drivers, so you’re not stuck with hefty out-of-pocket expenses like medical bills and repair costs.

In part three of our five-part series on understanding insurance coverage, learn how uninsured and underinsured motorist coverage can be there when you need it.

What is uninsured and underinsured motorist coverage?

An uninsured motorist is a driver without insurance or with less insurance than the state’s minimum limits of liability. An underinsured motorist is one with enough coverage to legally be driving, but not enough to cover the damage resulting from an accident they caused.

Uninsured motorist coverage falls under Part C of the auto policy, while underinsured motorist coverage typically falls under an endorsement on your auto policy. Some states require you to have one coverage but not the other, and in certain states you must have both. But just because your state doesn’t require it, doesn’t mean you shouldn’t carry this protection.

Uninsured and underinsured motorist coverage is typically broken into three parts: uninsured motorist bodily injury (UMBI), uninsured motorist property damage (UMPD) and underinsured motorist coverage (UIM).

Uninsured motorist bodily injury (UMBI) can help pay for pain and suffering and medical bills you and your passengers incur in an accident caused by a driver who doesn’t have car insurance. It can also provide coverage if you’re injured in a hit-and-run accident or struck by an uninsured driver as a pedestrian.

Uninsured motorist property damage (UMPD) can help pay for damage to your vehicle an uninsured driver causes.

Underinsured motorist coverage (UIM) can help cover a financial gap if the at-fault driver doesn’t have adequate coverage to fully compensate you for your medical bills, pain and suffering, or vehicle damage.

Do you need uninsured motorist coverage?

In almost all cases, uninsured motorist insurance is good to have. You may be partially covered in an accident with an uninsured or underinsured driver through your collision, medical payments or personal injury protection coverage. However, these may not always be enough. Here are a couple of cases where other coverages can overlap with UM and UIM.

  • If you’re injured in an accident with an uninsured motorist, your own medical payments or personal injury protection coverage can help pay your medical bills.This might not be enough if your injuries are severe, however. UMBI coverage can also compensate you for your pain and suffering. 
  • If your vehicle is damaged in an accident with an uninsured motorist, the collision coverage you carry can pay for repairs. If it includes a high deductible, keep in mind that UMPD coverage may be able to offer coverage with a lower deductible.

How much uninsured and underinsured motorist coverage do I need?

When you’re in an accident caused by a driver with either no auto insurance or not enough, it can increase your financial burden. Carrying uninsured and underinsured motorist coverage on your auto insurance policy can help you protect yourself against these potential losses. But how much coverage do you need? In the states that require it, the amount of UM/UIM coverage typically may not be less than the state minimums or more than the Part A liability limit.

For example, let’s say you live in a state where the minimum liability limits are 25/50/10 (meaning $25,000 bodily injury [BI] per person, $50,000 bodily injury per accident and $10,000 property damage [PD] per accident). You carry Part A liability limits of 100/300/100. You could purchase coverage amounts between these two limits. However, for the same reason you chose to carry 100 BI/300 BI/100 PD for Part A, you likely need the same limits for UM/UIM coverage. The one limit where needs may vary is in the last number, which pays for vehicle repairs if you have damage caused by an uninsured driver. If you carry collision coverage on your vehicle, you probably don’t need UMPD, as the collision coverage would take its place. If you don’t have collision coverage, this number should be in line with your vehicle’s replacement cost. This differs from property damage coverage in Part A liability, which covers damage you cause to other vehicles in an accident.

Amica offers UM/UIM coverage with all auto policies as state laws permit. Check with your insurance provider to get a clear understanding of which UM/UIM coverages are required and how much coverage you need to help safeguard yourself, your passengers and your vehicle.

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