Everything you Need to Know About Uninsured and Underinsured Motorist Coverage

April 19, 2020

Car accidents are a pain, literally and financially. If you get in a car accident and it’s not your fault, you would normally rely on the other driver’s insurance to cover it. What happens when that person doesn’t have enough or any insurance, though? Are you out of luck?

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Here’s what your insurance company will do about it.

How Uninsured Motorist Insurance Works

Uninsured motorist insurance has two coverage options:

  • Uninsured motorist bodily injury
  • Uninsured motorist property damage

Uninsured motorist bodily insurance helps you pay your medical bills that result from the accident. This protection only kicks in if the at-fault driver doesn’t have enough liability insurance to cover your bills. In some cases, this insurance also protects your passengers.

Uninsured motorist property damage insurance helps you pay for damage to your car as a result of the accident. Not all states allow this type of insurance though – check with your state to see if it’s available.

How Underinsured Motorist Insurance Works

In some cases, drivers don’t have enough insurance to cover the cost of damages. If you have underinsured motorist coverage, it may help you. This insurance only covers bodily injuries that you incur as a result of the accident and that the at-fault driver’s insurance won’t cover.

An underinsured driver is one that doesn’t have enough liability insurance to cover the cost of the damages from the accident or whose limits are less than the limits on your underinsured motorist insurance.

Unlike uninsured motorist coverage, underinsured insurance kicks in after the at-fault driver’s insurance pays the portion it can pay.

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What Does Collision Insurance Cover?

You may wonder if you need uninsured property damage coverage if you have collision coverage. You may or may not need it – it depends on the state that you live. Some states require uninsured motorist coverage, while others don’t.

If you live in a state that doesn’t require it, your collision insurance will cover the damages to your car no matter who caused the accident. Collision insurance also protects you in the event that you are involved in a single-car accident.

Do you Need Uninsured Motorist Coverage if you Have Health Insurance?

You may think that if you have good health insurance that you don’t need uninsured motorist coverage, but you may want to rethink this. Yes, health insurance will cover the cost of your medical bills that result from your injuries in a car accident. What health insurance won’t cover, however, are any loss of wages or pain and suffering that you endure. You may get reimbursement for these issues if you have uninsured motorist coverage.

Does Uninsured Motorist Coverage Have a Deductible?

Uninsured motorist bodily injury coverage doesn’t typically have a deductible. This means your insurance will kick in right away without you owing anything upfront. Uninsured property damage coverage, on the other hand, usually has a deductible. You’ll be responsible for part of the damages up to your deductible before insurance will kick in.

For example, if you have a $500 deductible, you must pay the first $500 in damages before insurance will help pay for the damages to your car from the car accident that you weren’t at fault.

Should you carry uninsured or underinsured motorist coverage? It really depends on your situation. Uninsured motorist coverage helps you in the event that you or your passengers are injured and experience issues, such as lost time at work, medical issues, and pain and suffering. Even with health insurance, you may get a little extra coverage from your uninsured motorist coverage. Uninsured property damage insurance is not as common and in some states is outlawed. If you have an old or invaluable car, it may not be worth adding it to your policy, but it depends on how much coverage you desire.

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