Personal Insurance

Protect Yourself from Underinsured and Uninsured Drivers

uninsured drivers

The canyon road was dark and full of weekend travelers. Sarah was momentarily stopped in traffic when she was suddenly rear ended by another vehicle. Her car was severely damaged, and her injuries required medical attention. Upon being released from the hospital, Sarah filed a claim with the other driver’s insurance company. The claim was paid, but the limits on the other driver’s policy were low and not enough to cover all of Sarah’s medical and vehicle repair expenses. This left her owing several thousand dollars to be paid out of her own pocket.  

This scenario depicts one of the hidden dangers on the road: uninsured and underinsured motorists. Despite mandatory insurance laws in 49 states, there is a significant number of drivers who are uninsured or underinsured.

  • About one of every eight motorists is uninsured (nearly 13 percent of drivers).
  • In some states, the percentage of uninsured motorists is as high as 26 percent.
  • The average cost of an uninsured motorist claim is about $20,000. This excludes any physical damage to the vehicle.

In addition to the number of uninsured motorists, many insured drivers carry only the minimum limits required by their state. These limits are often inadequate to cover all damages in an accident when the underinsured motorists are at fault. (Click here to learn more about state minimums and how much insurance is enough.)

Uninsured/Underinsured Motorist Coverage

Here are a few things you should know about how uninsured/underinsured motorist coverage works:

  • Covers the cost of injuries if you are involved in an accident caused by a hit-and-run driver, a driver who is uninsured, or someone who does not have adequate insurance.
  • Provides coverage for medical expenses, lost wages, and pain and suffering.
  • Provides coverage if you are hit as a pedestrian, cyclist, or commuter.
  • Does not cover damage to your vehicle. Insurers in most states offer uninsured/underinsured motorist property damage insurance (UMPD). This will pay for damage to your vehicle. The deductible for this coverage is often substantially less than the deductible for collision coverage in your auto insurance policy.
  • Coverage limits are flexible – you choose the coverage limit when you purchase this type of policy. It is strongly recommended that you match the limits for insured and underinsured liability with the liability coverage limits on your policy.
  • Can be added to your current policy at an affordable rate.

This coverage is not required in most states; however, it is something you should be familiar with and strongly consider when purchasing auto insurance. Specific coverage options for these policies vary by state, so it is a good idea to talk with your insurance agent to learn what options are available to you.

To conclude the scenario from the beginning of this article, Sarah contacted her insurance agent and found that her auto insurance policy included both UM/UIM and UMPD. She was able to apply this coverage to her remaining medical and vehicle repair expenses.

More information on this topic:
Do I Really Need Uninsured Motorist Coverage?
What is Uninsured & Underinsured Motorist Coverage?

References:
https://www.naic.org/cipr_topics/topic_uninsured_motorists.htm
https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists
https://www.insurancejournal.com/news/national/2018/03/15/483414.htm

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