If a driver without insurance hits your vehicle, you could be on the hook for big medical and repair bills — unless you have uninsured motorist coverage.
Uninsured motorist insurance and its companion, underinsured motorist coverage, spare you from shelling out your own money for injuries or property damage from crashes you didn’t cause. In some states this coverage is required, but you can get it in others. Generally, it doesn’t cost much to add to your auto policy. Here’s what else to know.
How uninsured motorist coverage works
An uninsured motorist is exactly who it sounds like — a person without liability auto insurance. When you’re in an accident and the other driver is at fault, their insurance is supposed to pay for your car repairs and medical costs for you and your passengers. If the other driver doesn’t have insurance and can’t pay, you can wind up holding the bill.
The same thing can happen when you’re in an accident with an underinsured driver. Underinsured motorists are drivers who have insurance, just not enough to pay for all the damage they’ve caused.
Uninsured/underinsured motorist coverage is designed to fill the gap between your costs and the other driver’s ability to pay.
Types of uninsured motorist coverage
There are two types of uninsured and underinsured motorist insurance:
- Coverage for injuries. Uninsured motorist bodily injury, abbreviated UMBI, and underinsured motorist bodily injury, or UIMBI, pay for medical bills and pain and suffering after an accident. Some insurers will allow you to make a claim against your UMBI if you were the victim of a hit-and-run.
- Coverage for property damage. Uninsured motorist property damage, called UMPD, and underinsured motorist property damage, abbreviated UIMPD, pay for repairs to your car and other things you own. This coverage may have a deductible — an amount you pay out of pocket before the insurance coverage kicks in — often in the $200 to $300 range.
State requirements for these coverages vary, and you may be able to buy them separately. Some states require UMBI coverage only, while UMPD is optional. In other places, both are either optional or mandatory.
Health insurance vs. uninsured motorist coverage
Health insurance will pay for medical treatment after a wreck. However, if the at-fault driver has auto insurance and you receive any reimbursement for injuries, your health insurer may demand a portion of it. This is true even if the claim check doesn’t cover your out-of-pocket expenses, because your health insurer likely expects the person who caused your injuries to pay the resulting medical bills.
With uninsured and underinsured motorist coverage, your auto insurance will cover your out-of-pocket medical expenses, up to your policy’s limits, even if the at-fault driver can’t pay.
Who needs uninsured motorist coverage
Drivers in 18 states and the District of Columbia are required to carry uninsured motorist coverage. Car insurance isn’t mandatory in New Hampshire or Virginia, but if drivers in either state purchase it, policies must include UMBI. In other states, you may be required to reject the coverage in writing if you don’t want it.
Even if uninsured and underinsured motorist coverages aren’t required where you live, there may still be good reason to have the extra security they provide. Roughly 13% of drivers nationwide — or about 1 in 8 — drive uninsured, according to a 2017 study by the Insurance Research Council, the most recent data available.
Since uninsured motorist coverage may pay out if you’re hit by an underinsured driver, it can also be useful if you’re hit by someone with minimum required car insurance. In many states, minimum liability limits for bodily injury are $15,000 or less — injuries after a bad crash could easily exceed that amount.
The cost of uninsured motorist coverage
Compared with other types of coverage in an auto policy, prices for uninsured motorist insurance are relatively low. Since liability insurance is meant to protect your assets should you cause a wreck, you would want the same financial assurance if someone else caused the wreck. For that reason, it’s standard to purchase uninsured motorist coverage in at least the same amounts as your liability limits. So, the more assets you have to your name and the more liability insurance you purchase, the higher your costs for uninsured motorist coverage are likely to be.
Still, uninsured and underinsured motorist insurance is cheaper than liability coverage when purchased in the same amounts — generally less than half the cost.