According to a 2021 study by the Insurance Research Council (IRC) one in eight motorists on the road did not have car insurance in 2019. If you were a victim of an accident caused by one of these drivers, how would you pay for repairs since state-required liability insurance does not cover your personal vehicle or injuries? In such cases, carrying uninsured/underinsured motorist coverage will provide coverage if you’re involved in an accident with someone with inadequate insurance.
What is Uninsured Motorist Coverage?
Uninsured motorist coverage (UM) is a form of insurance that provides financial protection for repair or medical bills if you are in an accident with a driver without state-required liability insurance. An uninsured driver is an individual operating a vehicle without carrying California’s required liability insurance. In California, insurance providers are required to offer you the coverage, but you have the option to decline it in writing.
Liability insurance normally covers bodily injuries and property damage you cause by a collision. However, if the person at fault does not carry insurance, you could be left to cover any repair or medical bills yourself. With uninsured motorist coverage, you help close the gap between your costs and the uninsured motorist’s ability to pay for the damage they caused.
What About Underinsured Motorist Coverage?
When reading about uninsured motorist coverage, you may have encountered underinsured motorist insurance (UIM). If both are offered in your state, you’ll find they are typically sold alongside each other as both coverages work similarly. However, the key difference is that underinsured motorist coverage is for collisions with at-fault drivers with some insurance but not enough to cover all related costs. In such cases, the underinsured at-fault motorist’s insurance will cover damages following their policy’s limits, and your UIM will cover the rest up to your policy’s limits.
What Will Uninsured/Underinsured Motorist Coverage Pay For?
As mentioned, UM and UIM provide coverage when you’re involved in a collision with someone with inadequate insurance. But what exactly does it cover? Depending on your location, uninsured/underinsured motorist insurance can be divided into the following categories:
Accidents with uninsured motorists:
- Uninsured motorist bodily injury (UMBI): will cover medical bills, lost wages, and funeral costs for you and your passengers that result from the accident.
- Uninsured motorist property damage (UMPD): if offered in your location, UMPD will pay for damage to your car following an accident with an uninsured motorist.
Accidents with underinsured motorists:
- Underinsured motorist bodily injury (UIMBI): will cover medical bills, lost wages, or funeral expenses for you and your passengers if you are involved in an accident with a motorist who does not carry enough liability insurance to cover all damages.
- Underinsured motorist property damage (UIMPD): will provide coverage when an underinsured driver causes an accident, but it cannot cover all of your vehicle’s repair costs.
Uninsured motorist coverage policy limits will typically mirror your liability coverage limits. For example, if you carry bodily injury limits of $50,000 per person and $100,000 per accident (50/100), you would also typically purchase 50/100 in UMBI coverage. In addition, some states may require a deductible for both UMPD and UIMPD claims. UMBI and UIMBI do not typically require a deductible.
Will Uninsured Motorist Property Damage Cover Hit-and-Run Accidents?
Some states may allow one to use UMPD to cover vehicle damage from a hit-and-run accident, but not all. Some providers may not even offer UMPD, depending on your state. In California, policyholders may only use UMPD to cover hit-and-run accidents if the fleeing motorist is identified. If you do not carry UMPD, you must have collision coverage to repair your car after a hit-and-run, which typically involves a deductible.
Should I Carry Uninsured Motorist Coverage If I Have Health Insurance
Since UMBI can cover bodily injuries, you may wonder why you need it if you already have health insurance. Although health insurance may cover your medical costs after an accident, it will provide your passengers with the same protection. Furthermore, your health insurance may come with a high deductible, whereas UMBI typically does not. You can also utilize UMBI/UIMBI to cover lost wages if you cannot work after a collision.
Protect Yourself with Uninsured Motorist Coverage
Although California does not require you to carry uninsured motorist coverage, having the protection can still be worth it. According to the Insurance Research Council, approximately one in eight drivers nationwide were uninsured in 2019 (the latest data available). With California’s minimum auto insurance requirements soon increasing, you don’t want to have to pay for repairs out of your own pocket.
At Orion Indemnity, we provide quality car insurance coverage tailored for California drivers. Whether you’d like to learn more about the coverages we offer or want to speak to an insurance agent, our team can help. Give us a call today at (833) 336-7466 to learn more.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.
