What is uninsured motorist coverage (and do I need it)?

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Uninsured motorist coverage 

If you’re the type, you have auto insurance for you, your passengers, other motorists, and your personal property in the event of an accident, which is important because the vast majority of people have a car accident at some point. given. their lives. In fact, according to an industry estimate, the average driver makes one collision claim every.

Automobile liability insurance, which covers bodily injury and property damage in the event of an accident, is mandatory in all states except New Hampshire.

Unfortunately, even if you live in a state that requires auto liability insurance and fully comply with the law, you can find yourself in financial trouble if you have an accident. Why? Because even states with mandatory insurance have problems with uninsured motorists, and if you have an accident with an uninsured (or underinsured) driver, you could end up on the hook for repairs, damages, and more.

What is uninsured motorist coverage?

Uninsured Motorist Coverage is a supplement to your insurance policy that covers medical and repair costs in the event of an accident and if the offending driver does not have auto insurance.

Underinsured motorist coverage is similar, but comes into play when the at-fault driver’s auto insurance has liability limits that are too low to cover all of the damages and expenses for which they are responsible.

Either way, you may be disappointed when it comes to getting payments for your damaged vehicle, medical bills, or other accident-related issues. There are two basic types of uninsured motorist coverage:

  • Uninsured Motorist Bodily Injury Coverage applies to medical expenses, lost wages, and suffering of all passengers in your vehicle at the time of the accident. It can also cover the difference between the other driver’s liability insurance and your costs. this type of uninsured motorist coverage usually comes with a split limit, meaning the amount of coverage varies depending on whether the claim is made per person or per accident – ​​for example, $15,000 per person or $30,000 $ per accident. Motorists can also opt for a single-limit combined policy, which pays a fixed amount per accident.
  • Uninsured Motorist Damage Coverage covers damage to your property in the event you or your property is involved in an accident with an uninsured driver. UMPD would cover repairs to your car and anything you had in your car at the time of the accident, but also damage to your property – for example, repairs to your landscaping if a car jumps off the curb and tears up your lawn or your fence. DMV.org notes that uninsured property damage coverage is not required or even available in all states.

How does stacking work?

If you insure more than one car on your policy, you may be able to “stack” your protection against uninsured or underinsured motorists in the event of an accident.

For example, if you own two cars with uninsured motorist coverage at $10,000 each and one of those vehicles is damaged in an accident in which the at-fault driver is uninsured, you can apply your two cars (total: $20,000). ) to the single accident.

Note that if you decide to stack insurance policies, you will likely see an increase in your premiums and cumulative coverage.

Do I need uninsured motorist insurance?

If you live in a state that requires uninsured motorist coverage, it’s obviously in your best interest to follow the law. Currently, one form of UM coverage (or financial liability) is Connecticut, Illinois, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Virginia, West Virginia, Wisconsin – and the District of Columbia. Eleven states also require coverage for underinsured motorists. States also set different minimum liability limits.

Sharp-eyed readers may have noticed that New Hampshire is among the states that require some form of underinsured motorist coverage. Although New Hampshire does not require drivers or vehicle owners to carry any specific type of insurance, they are required to prove their ability to meet the costs associated with an accident. Uninsured drivers who cannot agree with the other party on an accident involving costs greater than $1,000 can make restitution to avoid suspension of their driving privileges.

But what about the others? If you live in a state that does not require uninsured motorist coverage, you are not legally obligated to carry it.

However, a look at the states with the most uninsured motorists might change your mind. For example, more than a quarter of drivers in Florida were uninsured in 2015, as were one in five drivers in Tennessee, Michigan, and New Mexico.

Other reasons you might consider uninsured motorist coverage include:

  • Your state’s minimum liability coverage is exceptionally low.
  • You have a valuable vehicle that will be expensive to repair or replace.
  • You want hit-and-run driver coverage.
  • You want cover for being a pedestrian who is hit by a car.
  • You are uncomfortable taking the risk of being hit by an uninsured driver.

How much does uninsured motorist coverage cost?

Adding uninsured or underinsured motorist coverage to your policy will increase the cost of your car insurance premiums, but not by much.

While the price of uninsured motorist protection varies by insurer and state, a 30-year-old driver in California, whose average annual cost of auto insurance is $1,163, will pay $112 more per year, or less than 10 USD per month, for the uninsured. motorist coverage, bringing their annual premium to $1,275. Drivers in Illinois ($30 per year) or Pennsylvania ($66 per year) can expect to pay even less for protection.

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