3 Reasons You Need Underinsured Motorist Coverage
You’ve just been in an automobile accident. It’s bad enough that another driver hit you, but to make matters worse, he or she doesn’t have insurance. Even though the accident wasn’t your fault, who’s going to pay your damages?
Your uninsured motorist coverage, if you have it.
What Is Uninsured Motorist Coverage?
Uninsured motorist coverage is a type of insurance that will pay for injuries to you and your passengers, and sometimes even damage to your vehicle, if you are involved in a hit and run or an accident caused by an uninsured driver. For someone to be considered an uninsured driver, he or she must meet one of the following criteria:
- Has no automobile insurance at all.
- Has insurance but the coverage is not sufficient to meet the minimum liability requirements of his/her state.
- Has insurance, but the claim was denied by his/her insurance company and the driver is unable to pay for your damages out of pocket.
Even if uninsured motorist coverage is not legally required in every state, it is generally a smart idea to carry it, for the following reasons:
1. Lots of Drivers Don’t Have Insurance
Although insurance or proof of financial responsibility is required in all states, as many as 28% of the drivers in some states don’t have insurance. In Colorado, an estimated 11.5% of drivers do not carry insurance, according to the Rocky Mountain Insurance Information Association.
Colorado requires limits of $25,000 per person and $50,000 per accident for bodily injury, which covers you if you cause an accident in which someone else is hurt or killed. Although insurers in Colorado are required to offer uninsured (UM) and underinsured (UIM) coverage in the same amount as the bodily injury liability limits selected, UM/UIM can be waived if you reject it in writing.
2. Accidents Are Expensive, and You Might Need Help Paying the Bills
Most people decide to buy UM/UIM because it can cover economic damages like medical bills and lost wages as well as some non-economic damages like pain and suffering, if the driver who hit them is uninsured or underinsured. Uninsured and underinsured coverage also insures your household members as pedestrians.
In Colorado, UM/UIM limits start at $25,000/$50,000 and increase up to the same amount of liability coverage purchased. Uninsured motorist coverage is broken into two parts: bodily injury coverage (injuries) and property damage coverage (damage to your vehicle).
3. It’s Not That Expensive
Adding uninsured/underinsured motorist coverage to your car insurance policy may be relatively inexpensive, especially when you think about the protection it gives you, which could include paying your medical bills, lost wages, the cost of fixing or replacing your vehicle, and damages for pain and suffering. Even if the person who hit you is legally responsible for your injuries, you won’t recover from them if they don’t have any money to give you.
During the past several years, many people have been struggling financially, and more and more drivers either don’t have insurance or don’t have enough because they simply cannot afford it. Uninsured motorist coverage can help protect you from ending up in a similar situation.
Image by West Midlands Police.