Uninsured motorist property damage coverage, also known as UMPD, sounds sensible: If someone without insurance hits your car, this type of auto insurance coverage pays for the damage.
Nationwide, 12.6% of drivers didn’t have auto insurance in 2012, according to the most recent estimate from the Insurance Research Council. Many others have only the minimum auto insurance their state requires. The minimum liability coverage may not be enough to pay for damage a driver causes in an accident.
But if you examine the details of UMPD coverage, you may find that you don’t need it. If you have collision coverage, it would pay for the same damage. If you don’t, UMPD may or may not be worthwhile. Here’s a look at some of the variations of UMPD.
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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 (except in some states, as noted below). It also pays out if an underinsured driver hits you, which means it will pay for your car damage if the other person doesn’t have enough insurance. UMPD protection will pay you only up to the value of your vehicle — or in some states less — making it less helpful if you have an old car that isn’t worth much.
Similar but different coverage types are:
- Uninsured and underinsured motorist (UM/UIM) coverage. This pays for your injuries — not car damage — when someone with no or little insurance crashes into you.
- Collision coverage. This pays for damage to your own car that you cause (such as hitting a fence or another car), or for damage someone else causes. If someone else crashes into you, for example, you could make a claim against that person’s liability insurance or use your own collision coverage. Collision insurance comes with a deductible, such as $500, $1,000 or $2,000, that will reduce your claims check.
UMPD rules vary by state
UMPD is required in some states, optional in others and not available in some. Here are details, from the Property Casualty Insurers Association of America and state laws.
- Drivers must have UMPD in these states: Georgia, Hawaii, Maryland, New Jersey, New Mexico, North Carolina, Oregon, South Carolina, Utah, Vermont, Virginia, Washington and West Virginia, plus Washington, D.C. Utah and Washington allow policyholders to reject UMPD if they have collision coverage.
- Drivers must have UMPD unless they specifically reject it in writing in seven states: Alaska, Arkansas, California, Indiana, Mississippi, Rhode Island, Tennessee and Texas. The written rejection also applies to Utah and Washington drivers who have collision coverage.
- Drivers must be offered UMPD in five states: Colorado, Delaware, Illinois, Louisiana and Ohio. Colorado and Illinois require only that insurers offer it to customers without collision coverage.
- In Rhode Island it’s an optional coverage for drivers with collision insurance.
- In New Hampshire drivers are not required to buy any car insurance, but all coverage sold must include uninsured motorist coverage.
- The rest of the states have no requirement, which means it’s up to insurance companies whether to offer UMPD or not, and many don’t.
- States have many different requirements for how much damage UMPD must cover. In California, for instance, UMPD will pay only up to $3,500 or the value of the vehicle, whichever is less. But Alaska, Arkansas, Georgia, Louisiana, Mississippi, New Hampshire, North Carolina, Rhode Island and Texas require UMPD to cover up to $25,000 in damage.
- California requires insurers to provide a collision deductible waiver instead of UMPD to drivers who have collision coverage. This pays your collision deductible for an accident caused by an uninsured driver. Drivers can choose to reject it.
- UMPD may come with a deductible, which is the amount deducted from your claims check. Deductibles vary. Examples include no deductible in Virginia ($200 in a hit-and-run); a choice of no deductible or $300 in Indiana (deductible waived if the insured car is legally parked and unoccupied); $100 in Washington ($300 in a hit-and-run); $150 in Vermont; $200 in Mississippi, Oregon ($300 in a hit-and-run), Rhode Island and Washington, D.C.; $250 in Alaska, Delaware, Illinois, Louisiana, New Mexico, Ohio, Texas and Utah; and $500 in New Jersey. In Arkansas and Tennessee, a $200 deductible is waived if you also have collision coverage, the other driver is identified, and that driver was solely at fault.
- UMPD provides coverage only if the driver is identified in certain states, including California, Illinois, Indiana and Ohio. Louisiana’s insurance guide says: “Hit-and-run drivers may be classified as uninsured motorists if there is a disinterested witness to the accident.”
Do you need UMPD protection?
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 coverage: It generally has a lower deductible. 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, an industry group. “It doesn’t make any sense.”
UMPD protection might make sense if you have only liability coverage, which pays only for damage and injuries you cause to others. Without UMPD, 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, notes Passmore, adding that “it would provide you some measure of coverage if you get hit by somebody who doesn’t have insurance.”
Then again, if you’ve already decided that collision coverage isn’t worthwhile, you might not want to pay for UMPD protection, either. That could be because your car isn’t worth much, and generally UMPD would pay only up to the value of your vehicle.
Whatever insurance types you decide you need, you can find rates using NerdWallet’s car insurance comparison tool.