What Is Uninsured Motorist Coverage (and Do I Need It)?

If you’re like almost 90% of motorists, you have some auto insurance to cover you, your passengers, other motorists, and your personal property in the event of an accident. That’s a good thing, too, because the vast majority of us get into a car accident at some point in our lives. In fact, by one industry estimate, drivers average a collision claim every 17.9 years.

Furthermore, most drivers are required to carry at least some sort of car insurance. Auto liability insurance, which covers bodily injury and property damage when you’re at fault for an accident, is required in every state except New Hampshire, according to the Insurance Information Institute. States set their own minimum liability limits and requirements for insurance verification.

But, even if you live in a state that requires auto liability insurance, and are in full compliance with the law, you can find yourself in financial trouble if you get in an accident. Why? Because even states with compulsory insurance have issues with uninsured motorists, and if you get in an accident with an uninsured (or underinsured) driver, you could find yourself on the hook for repairs, damages, and more.

What Is Uninsured Motorist Coverage?

Uninsured motorist coverage protects you in the event that you get into an accident with a driver who’s uninsured or underinsured. There are two basic types of UM coverage:

  • Uninsured Motorist Bodily Injury Coverage covers medical expenses, lost wages, and pain and suffering for you and anyone else in your vehicle at the time of the accident. It may also cover the gap between the other driver’s liability insurance and your costs. DMV.org reports that this type of uninsured motorist coverage typically comes with a split limit, meaning that coverage amounts vary depending on whether the claim is per person or per accident — for example, $15,000 per person or $30,000 per accident. Motorists can also opt to purchase a combined single limit policy, which pays out a set amount per accident.
  • Uninsured Motorist Property Damage Coverage covers damage to your property in the event that you or your belongings are 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 an accident, but would also cover damage to your property—for example, repairs to your landscaping should a car jump the curb and tear up your lawn or fence. DMV.org notes that uninsured property damage coverage isn’t required or even available in every state.

Do I Need Uninsured Motorist Coverage?

If you live in a state that requires uninsured motorist coverage, obviously it’s in your best interests to comply with the law. Currently, some form of UM coverage (or financial responsibility) is required in 20 states — 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 underinsured motorist coverage. States set different minimum liability limits, as well.

Sharp-eyed readers might have noticed that New Hampshire is among the states that require some form of underinsured motorist coverage. That’s because, while New Hampshire does not require drivers or vehicle owners to purchase any specific type of car insurance, it does require them to be able to assume financial responsibility for costs associated with an accident. Uninsured drivers who can’t come to an agreement with the other party in an accident with costs exceeding $1,000 can make restitution directly to the New Hampshire DMV to avoid the suspension of their driving privileges.

But, what about everyone else? If you live in a state that doesn’t require uninsured motorist coverage, obviously you’re not legally obligated to carry it.

However, one look at the Insurance Information Institute’s list of states with the most uninsured motorists might change your mind. For example, over a quarter of drivers in Oklahoma were uninsured in 2012.

Regardless, it only takes one driver without adequate coverage to cause you a major financial headache that last long after an accident. If uninsured motorist coverage is available in your state, you might want to take advantage of it.

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