What is Uninsured Motorist Coverage?

Uninsured Motorist coverage (UM) is now mandatory in most states. In states where it is not mandatory, you will have the option to select it. If for any reason you choose not to purchase uninsured motorist coverage, in many states you must provide a signature to waive the option in your policy.

Basically, uninsured motorist coverage will protect you against bodily injury, medical expenses, rehabilitation, and lost wages you may incur in the event of an accident caused by another driver who does not have liability insurance.

If you are in an accident that is not your fault, and DON’T have uninsured motorist coverage, any bodily injury you or your passengers suffer will not be paid for by your insurance company. You will have to sue the individual who caused the accident and hope they have the money to pay. Uninsured motorist coverage will also provide insurance benefits for you if you are the victim of a hit-and-run driver.

Keep in mind that physical damage is not automatically covered just because you elect to purchase uninsured motorist coverage. In some states, you have the option to purchase uninsured motorist coverage for your property damage as well.

Example: Ken has an insurance policy that includes uninsured motorist coverage as part of his liability insurance and Collision and Comprehensive Physical Damage coverage (with a $500 deductible). Suzie, who has no insurance, runs into Ken’s car at a stoplight. The accident causes $3,000 in damage to Ken’s car and breaks his arm, which costs $2,000 to cast, and keeps him out of work for 6 weeks.

Fortunately, Ken’s Uninsured Motorist coverage would pay for his medical expenses and lost wages, since Suzie did not have insurance to cover it. The $2,500 damage to Ken’s car would be covered by his Physical Damage coverage (not his UM), subject to the $500 deductible he would have to pay.

As with all insurance coverage, it is in your best interest to purchase uninsured motorist coverage if your insurance budget will allow it. (Do I need uninsured motorist coverage?) Make sure you speak with your insurance company or agent to discuss different coverage options and exclusions.

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This post was written by The Truth Team on August 14, 2008 Comments (0)