Under this coverage, the policyholder is compensated for losses sustained after an accident resulting from the fault of an uninsured driver. Also, underinsured motorist coverage is needed when the responsible driver has auto insurance, but it isn’t enough to cover the policyholder’s fees.
Key Things to Know About Uninsured Motorist Coverage
• Uninsured motorist (UM) and underinsured motorist (UIM) insurance will cover your medical expenses and vehicle repair costs up to predetermined limits.
• The two types of uninsured motorist coverage are bodily injury (UMBI) and property damage (UMPD).
• Twenty states and the District of Columbia require drivers to have uninsured motorist insurance, while 14 require UIM.
• Even where it’s not required, uninsured motorist insurance is a good investment, especially in states with high rates of uninsured driving.
How Does Uninsured Motorist Coverage Work?
Uninsured motorist insurance (UM) provides coverage for bodily injury and property damage just like all other liability products. In case of an accident with an uninsured motorist, the person with uninsured motorist coverage may be covered under UM coverage. In the event of an accident where the at-fault driver does not have enough insurance to cover your medical bills and vehicle damage, Underinsured Motorist (UIM) insurance may cover your expenses.
Uninsured/Underinsured Motorist Coverage Applies When:
• The accident is not your fault.
• The at-fault driver doesn’t have enough liability insurance to pay for your injuries or property damage.
• You’re the victim of a hit and run (excluding some states).
Uninsured motorist coverage may be compulsory in some states only, while underinsured motorist coverage may also be required in others.
Body injury coverage pays for your medical costs, pain and suffering, lost income, and funeral costs if you’re uninsured or underinsured. Drivers can also purchase property damage insurance, which pays for auto repairs and properties such as fences damaged due to natural disasters. Unfortunately, not all states offer uninsured/underinsured property damage coverage.