Your Safety Net on the Road: Understanding Underinsured and Uninsured Motorist Auto Insurance Coverage

Earlier this week, a client called asking how to improve his automobile insurance coverage by adding to his policy. Since he was currently in recovery from injuries caused by a commercial vehicle, he wanted to check out opportunities to protect himself moving forward. With his current collision, the at-fault driver was covered with liability automobile insurance. When we first met, we did not have the at-fault driver’s insurance, so I explained to him what protections would benefit him in the future. While I hope he never needs to apply this coverage, it is always helpful to prepare and protect in the event of a lifechanging event. Here’s some of what we discussed and some details inspired by our discussion. 

When it comes to auto insurance, the terms “underinsured” and “uninsured motorist coverage” might seem confusing at first glance. However, understanding these concepts is crucial for ensuring that you are adequately protected while driving. In this blog post, we will delve into what these coverages are, how they work, and why adding them to your policy doesn’t have to mean higher rates.

What is Underinsured and Uninsured Motorist Coverage?

Uninsured Motorist Coverage (UM) protects you in case you are involved in an accident with a driver who does not have any auto insurance. Despite state laws requiring drivers to carry automobile insurance, many still take the risk of driving without it. If you find yourself in an accident with an uninsured driver, having UM coverage can help cover your medical expenses, lost wages, and pain and suffering.

Underinsured Motorist Coverage (UIM), on the other hand, kicks in when you are in an accident with a driver who has insurance, but their coverage limits are insufficient to pay for your damages. For instance, if you incur $100,000 in medical expenses but the at-fault driver only has $50,000 in liability coverage, your UIM coverage would help bridge the gap, covering the outstanding balance.

Why Should You Consider Adding This Coverage?

1. Peace of Mind: Knowing you have financial protection in place offers peace of mind. You can drive with confidence, knowing that if the worst happens, you won’t be left with crippling expenses.
2. Financial Security: Medical bills and other expenses can add up quickly after an accident. UM and UIM coverage can help ensure that you don’t face excessive out-of-pocket costs due to another driver’s negligence or lack of insurance.
3. Legal Protection: In the event of an accident, having this coverage can alleviate some of the legal complexities. You are protected from unforeseen liabilities and can focus on your recovery.

Does It Increase Your Auto Insurance Rates?

One of the most common misconceptions about adding underinsured and uninsured motorist coverage is that it will significantly increase your auto insurance premiums. However, this is not necessarily true. Here are a few reasons why:

1. Low Cost: Generally, UM and UIM coverage tends to be relatively inexpensive compared to other parts of auto insurance. The additional cost is often minimal compared to the comprehensive protection it provides.
2. Risk Pooling: Insurance companies operate using risk pools. By adding these coverages, you may actually lower your risk profile by ensuring that you’re covered in more scenarios—this can sometimes lead to lower rates overall.
3. Discount Options: Many insurance providers offer discounts for bundling policies or maintaining clean driving records. These discounts help mitigate any potential increase in premiums related to the additional coverage.
4. State Regulations: In some states, insurance companies are required by law to offer UM and UIM coverage. This means that the rates might already be balanced to account for this coverage as a standard offering, minimizing any spike in costs.

Conclusion

Uninsured and underinsured motorist coverage can serve as crucial safety nets for drivers. They provide much-needed peace of mind and financial security in uncertain circumstances, protecting you from potential financial burdens stemming from another driver’s lack of insurance.

When considering your auto insurance policy, don’t shy away from adding UM and UIM coverage because of fears regarding rate increases. Instead, discuss it with your insurance agent, explore your options, and find a coverage plan that best suits your needs without breaking the bank. Remember, auto insurance is not just a legal requirement; it’s your shield against the unexpected on the road. Drive safe and protect yourself!

As always, do not hesitate to contact Virginia Josey Law if you may have a claim or question about your underinsured or uninsured auto insurance coverage. We are here to help! 

At Virginia Josey Law, we are more than just legal representatives - we are advocates for justice and allies for those who need us most.