You drive every day assuming everyone else on the road also has insurance. That assumption can cost you thousands of dollars. According to the Insurance Research Council, roughly one in eight drivers in the United States carries no insurance at all. That means in a typical collision, there is a better than twelve percent chance the other driver has no liability coverage to pay for your injuries or damages. Uninsured motorist coverage, often called UM coverage, is the only protection you have against that specific risk.
UM coverage is a part of your own auto policy that pays you if you are hit by a driver who has no insurance. It also applies if you are the victim of a hit-and-run accident where the other driver cannot be identified. The coverage works exactly like liability insurance, but from the inside out. Instead of your insurance company paying someone else because you caused an accident, your own company pays you because someone else caused the accident and cannot pay.
There are two basic forms of this coverage. Uninsured motorist bodily injury pays for medical expenses, lost wages, pain and suffering, and other injury-related costs. Uninsured motorist property damage pays for repairs to your vehicle. In many states, the property damage portion is limited or handled differently, so you need to check your specific policy. Some states require you to buy UM coverage. Others allow you to reject it in writing. If you live in a state where rejection is permitted and you signed a waiver, you have no UM coverage at all.
A related but distinct coverage is underinsured motorist coverage, often called UIM. This applies when the other driver has insurance, but their policy limits are too low to cover your full damages. For example, suppose the other driver has a policy that only pays twenty-five thousand dollars per person, but your medical bills alone run sixty thousand. Your own UIM coverage can step in to pay the difference, up to the limits you purchased. Most insurers sell UM and UIM together as a single endorsement, but not always. You should verify whether your policy includes both.
The amount of UM coverage you should carry is a critical decision. A common strategy is to buy UM limits that match your own liability limits. That way, you are protecting yourself at the same level you protect others. If you carry one hundred thousand dollars in liability coverage per person, you should carry the same amount in UM coverage. The cost difference between low limits and high limits is usually small. Insurance companies charge relatively little for this coverage because the risk of being hit by an uninsured driver is lower than the risk of causing an accident yourself. For most drivers, the premium increase from twenty-five thousand to one hundred thousand in UM coverage is only a few dollars a month.
What many people do not realize is that UM coverage follows you, not just your car. If you are a pedestrian struck by an uninsured driver, your UM coverage can pay your medical bills. If you are riding as a passenger in a friend’s car and an uninsured driver hits you, your own UM coverage can apply. The coverage also extends to family members living in your household who are listed on your policy. This portability makes UM one of the most valuable protections you can have.
In a hit-and-run case, UM coverage requires physical contact between your vehicle and the other vehicle in most states. If a driver swerves and forces you off the road but never touches your car, you may not qualify for UM benefits. Some policies have a requirement that you report the hit-and-run to police within a specific time, often twenty-four hours. Failing to file a police report can kill your claim outright. You need to understand the specific requirements in your policy and your state.
One major catch with UM coverage is that it is subject to a subrogation clause. That means if your insurance company pays you under UM, they then have the right to sue the uninsured driver to recover the money they paid you. You cannot do anything to interfere with that right. If you sign any agreement with the uninsured driver that releases them from liability, you could lose your UM benefits. Always consult a lawyer before signing anything after an accident involving an uninsured driver.
Another important point is that UM coverage does not stack automatically unless you have specifically paid for stacking. Stacking means you can add together the UM limits from multiple vehicles on the same policy. For example, if you own two cars and each has twenty-five thousand in UM coverage, stacking would allow you to collect up to fifty thousand. Not all states allow stacking, and not all policies offer it. If you want stacking, you usually have to request it and pay an extra premium.
When you file a UM claim, your own insurance company has the same duties they would have if you were making a claim against someone else’s policy. They must investigate the accident fairly, evaluate your damages, and make a reasonable settlement offer. If they refuse to pay or offer an unreasonably low amount, you have the same legal rights to sue your own insurer as you would have against a third-party carrier. Many states allow you to sue for bad faith if your insurer unreasonably denies or delays your UM claim.
The bottom line is straightforward. Uninsured motorist coverage is not optional if you want to be fully protected. It costs little, covers you in situations where the other driver has nothing, and extends to hit-and-run accidents. Check your policy declarations page today to see what limit you have. If you have a waiver on file, consider reinstating the coverage. A few extra dollars per month is cheap insurance against a financial disaster that is far more common than most people think.
