Uninsured motorist property damage coverage, also known as UMPD, sounds sensible: If someone without car insurance hits your car, UMPD pays for the damage.
Nationwide, 12.6% of drivers didn’t have any auto insurance in 2012, according to the most recent estimate from the Insurance Research Council. Many others buy only the minimum auto insurance their state requires, which may not be enough to pay for damage a driver causes in an accident.
UMPD can be easily confused with:
- Uninsured and underinsured motorist (UM/UIM) bodily injury coverage (UMBI). This pays for your injuries — not car damage — when someone with little or no insurance crashes into you.
UMPD overlaps with:
- Collision coverage. This type of auto insurance also pays for damage to your own vehicle. So if UMPD is optional in your state, you probably don’t need both.
What uninsured motorist property damage covers
UMPD pays for damage if your car is hit by a driver without insurance or you are the victim of a hit-and-run, in most states. It also pays out if an underinsured driver hits you, which means it will pay for your car damage after the other person’s insurance is used up and there are still repair bills.
Rules for UMPD vary by state. It’s not available in all states, some states require it, and some states require that it be offered to you.
A look at UMPD laws
|Where drivers must have UMPD|
|Where drivers must buy UMPD unless they specifically reject it in writing|
|Where drivers must be offered UMPD but don’t have to buy it|
|Where drivers can request UMPD if they don’t have collision coverage||
- UMPD limits: States have different requirements for the minimum amount of damage that UMPD must cover. In California, for example, it’s only up to $3,500. But in Texas the minimum is $25,000.
- Deductibles: UMPD may have a deductible, which is the amount deducted from your claim check. Amounts vary by state but are often around $200 to $300.
- California requires insurers to offer what’s called a collision deductible waiver. This pays your collision deductible for an accident caused by an uninsured driver. If you have that, you don’t need UMPD.
- Hit and runs: In certain states UMPD provides coverage for hit-and-run accidents only if the driver is identified, including California.
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Do you need UMPD?
If you have collision coverage, it would also pay for damage caused by a driver without insurance or without enough coverage. In this situation, there’s really only one advantage to uninsured motorist property damage coverage: It generally has a lower deductible than collision coverage. But that’s not enough to justify buying UMPD if you already have collision coverage.
“If it’s not required, you’re kind of paying for the same thing,” says Robert Passmore, assistant vice president for personal lines at the Property Casualty Insurers Association of America, a trade group. “It doesn’t make any sense.”
UMPD makes more sense if you have only liability coverage, which pays for damage and injuries you cause to others. Without UMPD or collision coverage, if an uninsured driver crashes into your car, your only option would be to sue the driver.
UMPD is a lot less expensive than collision coverage, Passmore notes, adding that “it would provide you some measure of coverage if you get hit by somebody who doesn’t have insurance.”