Most U.S. drivers have car insurance. Whether it’s because their state requires it, or they just want to be on the safe side in case of an accident, about 87.4% of drivers choose to carry car insurance. But what about the uninsured 12.6% left over? And what happens if you get into a wreck with an uninsured driver?

That’s where uninsured/underinsured motorist coverage comes in. This type of coverage is important to consider when taking out a car insurance policy, knowing that there are plenty of drivers out there without insurance. At Elephant Insurance, we don’t want to fearmonger, but we do want to make sure you’re as informed as possible to keep you safe from any on-the-road eventualities. In this article, we’ll break down uninsured/underinsured motorist coverage, how it works, and why you might need it.

What is uninsured/underinsured motorist coverage?

Uninsured/underinsured motorist coverage is a type of insurance that protects you if you get into an accident with a driver who doesn’t have liability insurance, or who doesn’t have enough liability coverage to pay for all of your damages. Your uninsured/underinsured motorist coverage options vary widely by state; some states have made this type of coverage mandatory, while others don’t require it at all.

What does it cover?

Depending on your state, your insurance company, and the exact policy you have, uninsured/underinsured motorist coverage can help pay for vehicle repair costs, medical expenses, loss of income, pain and suffering, and funeral expenses. If you opted out of this type of additional coverage and get into an accident with an uninsured driver, you may end up having to pay for everything on your own.

Are hit-and-run accidents covered?

As is the case with many insurance questions, the answer is: it depends. At Elephant’s headquarters in Virginia, uninsured/underinsured motorist coverage is optional…but if you have it, it will help cover the costs of a hit-and-run accident.

Uninsured vs underinsured: what’s the difference?

These two terms are nearly identical and are often used interchangeably. However, there are a few key differences between the two.

Underinsured motorist coverage

Underinsured motorist coverage helps protect you financially if you get into an accident where the other driver is at-fault and has some auto insurance, but not enough to cover your full expenses. In this situation, the underinsured, at-fault drivers’ insurance will pay for your injuries and expenses up to their policy limit, and then your underinsured motorist coverage will kick in to cover the rest. If you opt out of this coverage, you could instead end up having to pay out of pocket for everything the other drivers’ insurance couldn’t cover, even though the accident wasn’t your fault.

Uninsured motorist coverage

Uninsured motorist coverage gives you very similar protection as underinsured motorist coverage, but is meant to protect you from drivers who have no insurance at all, instead of just a low amount. While there are certain circumstances in which a driver can legally drive without insurance (Virginia allows drivers to pay a $500 Uninsured Motorist Fee in order to opt out of coverage), car insurance is legally required in almost all U.S. states. If you get into an accident with someone who doesn’t have any insurance coverage at all, they might very well be driving illegally. Even if they aren’t, odds are they won’t be able to afford to cover your expenses stemming from the accident. Uninsured motorist coverage protects you from having to shell out your hard-earned money in this situation.

Two types of uninsured/underinsured motorist coverage

Now that we’ve explained the difference between uninsured and underinsured motorist coverage, we’ll go through the two different coverage options offered under each of those two insurance types.

Uninsured/underinsured motorist bodily injury coverage

Uninsured/underinsured motorist bodily injury coverage, or UMBI, can help pay for your medical treatments, pain and suffering, lost wages, and funeral expenses if you are in an accident caused by an uninsured or underinsured driver. This type of coverage may also apply if you are hit by an uninsured/underinsured driver as a pedestrian or while riding your bike.

Uninsured/underinsured motorist property damage coverage

Uninsured/underinsured motorist property damage coverage, or UMPD, takes care of costs for damage to your car or personal property after an accident with an at-fault driver with too little insurance, or no insurance at all.

How do I decide how much coverage I need?

First, you’ll want to really think about the information above regarding everything that uninsured/underinsured motorist coverage can help pay for. If you opt out of this coverage, or choose lower coverage limits, would you be able to afford all your expenses after an accident with an uninsured or underinsured driver? Medical bills and vehicle repair expenses can really pile up, so keep this in mind when choosing your coverage amounts.

For your UMPD coverage, it’s a good idea to choose a limit as close as possible to the value of your vehicle, especially if you don’t have collision coverage. So, if your car is worth about $30,000, you should opt in for at least that same amount in UMPD coverage. This way, even if your car is totaled, you won’t end up having to pay out of pocket.

For your UMBI coverage, things are a little more complicated, as the coverage amount you choose should depend on your liability coverage limits. Liability coverage generally has two limits, and is written as follows: limit per person / limit per accident. So, if your liability coverage limits are written as $50,000/$100,000, then, in the event of an accident, your insurance company may pay out up to $50,000 per person involved, up to a total of $100,000. So, if you are in an accident where you and a passenger are both injured, and each of you receives $50,000 for your medical expenses, you’ve reached the total liability insurance payout for your accident. However, if you choose UMBI coverage with identical limits, you’ll have a lot more financial wiggle room in case of a more severe accident.

How does the payout from a claim work?

Depending on your state, your UMBI or UMPD coverage may come with a deductible. So, if your UMPD coverage has a limit of $15,000 and you have a $300 deductible, in an accident where the at-fault driver caused $5,000 in damage, your insurer would cover $4,700 worth of your repair expenses, leaving you to pay the $300 deductible.

Which states require uninsured and/or underinsured motorist coverage?

Drivers in 18 states (Oregon, North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Missouri, Wisconsin, Illinois, West Virginia, Maryland, North Carolina, South Carolina, New York, Vermont, Massachusetts, Connecticut, and Maine) and D.C. are legally required to carry uninsured/underinsured motorist coverage. In New Hampshire and Virginia, car insurance is not legally mandated; however, if a driver does choose to take out a policy, it must include both UMBI and UMPD insurance.

uninsured motorist coverage


Is uninsured/underinsured motorist coverage worth it?

If your state is among the 32 that don’t legally require uninsured/underinsured motorist coverage, you might be tempted to try and squeak by without it. While the question of whether this coverage is worth it or not is up to you, we say that all signs point to yes. It may be a cliché, but we believe it’s always better to be safe than sorry. If you opt out of uninsured/underinsured motorist coverage and you get into an accident with any one of the 12.6% of US drivers on the road without insurance, your expenses can rack up rapidly. Shop around to find a policy price you’re comfortable with, and know that the expense is money well spent. Contact us to learn more, or get a quote today.

Article last updated on June 25th, 2023 at 6:46 pm

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