What Is Under-insured Motorist Coverage, And Is It Necessary?

Apr 11, 2019 | Insurance Information

Let’s say your friend was on the way to his weekly martial arts class and, without warning, his car is struck by another driver’s vehicle. Not only has his morning been ruined by this frightening and damaging event, but the other driver’s car insurance is insufficient to cover your friend’s injuries. The other driver had only the minimum required coverage.

This gets you thinking—what would you do in that situation? How would you obtain compensation for your medical bills, lost income, and pain and suffering caused by the under-insured driver? Is under-insured motorist insurance worth the added expense?

The answer to these questions depends on the specific circumstances in your life, but typically, the answer is yes. It’s essential to protect yourself and your family from other motorists with insufficient insurance coverage. With the following information, you’ll be able to make your own informed decision on whether the coverage is right for you.

What Does Under-Insured Motorist Coverage Apply to?

There are actually several categories of insurance coverage that protect you from uninsured and under-insured motorists. Uninsured coverage, for example, covers you if the other driver has no insurance coverage at all. Under-insured coverage applies when the other driver does have some insurance, but it’s not sufficient to cover all of your damages. In many states, there are three parts to this type of insurance coverage:

  • Under-insured Motorist Insurance (UIM)
  • Uninsured Motorist Insurance (UM)
  • Uninsured Motorist Property Damage Insurance (UMPD)

While these types of insurance coverage are not necessarily required in Arizona, they are offered as additional optional coverage by insurance companies. Check your state’s minimum car insurance requirements to find out whether this type of coverage is required.

What is Under-insured Motorist Coverage?

Under-insured motorist coverage (UIM) applies when the other driver is at fault and has insurance coverage, but their policy limits are insufficient to cover all of your damages. While there are other avenues for collecting the balance, like filing a personal injury lawsuit against the other driver, they aren’t foolproof. After all, if the other driver can’t afford sufficient insurance, they are unlikely to have enough assets to pay your damages even if you win the lawsuit. With UIM, your own insurance will cover the amount that the other party cannot pay, up to your own under-insured policy limit amounts.

What is Uninsured Motorist Coverage?

Uninsured motorist coverage (UM) covers certain types of your damages if you are in an accident where a motorist that does not have any insurance is found to be at fault. It also provides coverage when the at-fault driver flees the scene and cannot be identified.

Some of the damages might include lost wages, pain and suffering, and medical expenses, not actual damage to the vehicle.

What is Uninsured/Under-Insured Motorist Property Damage Coverage?

Some states offer uninsured/under-insured motorist property damage coverage. This is where car repairs and personal property damage from an accident with an uninsured or under-insured driver can be covered.

While UM and UIM are mainly intended to cover personal injury, uninsured/under-insured motorist property damage coverage covers damage to your vehicle and other personal property. It applies whether the other party is uninsured or under-insured.

Do I Need Coverage of This Type?

Determining the coverage right for you depends on your specific situation. We highly recommend, however, getting uninsured motorist coverage to protect yourself and your family from drivers with no insurance. For example, in Arizona about 12% of motorists are uninsured drivers. Arizona ranks #24 in states with uninsured drivers.

If the minimum required liability limits in your state are so low that you are concerned that an under-insured driver might not be able to cover your damages in the event of an accident, then you should also get under-insured motorist coverage.

If you aren’t sure whether you need this coverage, or you aren’t sure what type or how much you should get, consult with an experienced insurance agent to help you decide what options are best for you.

An Attorney Can Help

If you are involved in a motor vehicle accident, consult with an experienced personal injury at the Folger Law Firm. The Folger Law Firm will identify the coverage available under the at fault party’s insurance policy and other policies to provide compensation for your injuries.