What is Uninsured & Underinsured Motorist Coverage and Why Do You Need It?

What is Uninsured & Underinsured Motorist Coverage and Why Do You Need It?

By Ben Kraus


Uninsured and Underinsured  Motorist coverage or UM/UIM coverage is one of the most important parts of your auto insurance policy.  Uninsured motorist coverage is designed to compensate you in the event of an accident, caused by a driver who is uninsured, or inadequately insured. You may have UM/UIM coverage up to your policy limits for liability.

The uninsured part of this coverage is simple. If you’re hit by a driver without insurance, or a hit and run driver, you can receive compensation up to the policy limit. The underinsured section comes into play when you’re hit by someone with insurance but does not cover the full amount of the damages.  Say you are hit by someone carrying the Ohio state minimum insurance ($12,500/$25,000), but the damages you sustained amounted to $100,000. If you were carrying a UM/UIM policy of $100,000/300,000 it would cover that difference of $87,500. Your UIM coverage will only apply if the other driver has lower limits of liability then your UM/UIM coverage.

When considering the number of uninsured drivers on the road or the amount of drivers only carrying the state minimum this coverage becomes essential to protecting yourself in the event of an accident.  A study by the Insurance Research council estimates that nearly 16 percent of Ohio drivers are uninsured (http://www.ircweb.org/News/IRC_UM_012109.pdf). If you then consider the amount of drivers with only the minimum state coverage it becomes increasingly alarming.

Some may argue that your health insurance will protect you in an event of an accident with an uninsured motorist. This is true to an extent however health insurance will not pay for certain expenses like pain and suffering or lost wages due to injuries. This is where your UM/UIM insurance can pick up the bill.

Fortunately the cost of UM/UIM coverage is generally minimal. The benefits of this coverage are plentiful and the exposure to uninsured or underinsured motorists are high. It’s important for every individual or family to look into getting the highest possible UM/UIM coverage for their policy.

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