How to Defend Yourself from Uninsured and Underinsured Motorists

If you're in the middle of switching auto insurance companies or purchasing an insurance policy for the first time, you are going to hear about uninsured motorists and underinsured drivers too. Not only do these drivers impact overall rates in a state, but defending yourself from them will cost you extra too.
An uninsured driver is exactly what it sounds like — someone driving a vehicle but does not have insurance. An underinsured driver is someone who does have an auto insurance policy. Still, their insurance limits do not adequately cover the bodily injury and property damage expenses to the other driver when the underinsured driver is at fault for the car accident.
For most states, it's optional for drivers to carry uninsured/underinsured motorist coverage, which provides extra protection against these scenarios. When faced with whether to have these insurance options, you should keep a few key points in mind.

The Data Behind Uninsured Drivers

Despite it being illegal in every state (other than New Hampshire) to drive without insurance, it is more common than you might realize. Roughly about 12% of the driving population is driving uninsured. This means one out of every ten cars you pass may not have the insurance coverage you expect them to have.
And some states have a much higher likelihood of uninsured drivers on the road. Here are the Top 10 states, including Washington D.C., with the highest rates.
StatePercentage of Uninsured Drivers
Mississippi29.4%
Michigan25.5%
Tennessee23.7%
New Mexico21.8%
Washington21.7%
Florida20.4%
Alabama19.5%
Arkansas19.3%
District of Columbia19.1%
California16.6%
So what can you do as a driver? Avoid driving in these ten states? Refuse to get in a serious accident with someone without insurance? Obviously, this isn't a realistic approach. But the good news is, there are options for your policy in the event of an accident with someone who either doesn't carry insurance or doesn't have enough insurance.

How Uninsured and Underinsured Motorist Coverage Work

Uninsured motorist (UM) coverage and underinsured motorist (UIM) are typically lumped into two categories. You may recognize these terms from the liability portion of your insurance policy.

Uninsured and Underinsured Motorist Bodily Injury Coverage (UMBI/UIMBI)

This covers you and your passengers' medical expenses, lost wages, and pain and suffering resulting from an accident with someone who does not have insurance or enough insurance.
UMBI and UIMB can also pay funeral expenses if necessary.

Uninsured and Underinsured Motorist Property Coverage (UMPD/UIMPD)

This coverage protects your vehicle if you are involved in an accident with an uninsured or underinsured driver. Typically, this coverage pays for expenses related to a collision deductible, rental car coverage costs, and any other costs associated with your vehicle's repair or replacement.

Additional Scenarios

Some insurers turn to your UM coverage in the event of a hit-and-run. A hit-and-run is defined as an accident where the at-fault driver flees the scene before exchanging the information. There are hundreds of thousands of hit-and-runs each year and thousands of fatalities resulting, which is one of the many contributing factors to insurance costs in each state.
Another benefit of UMBI is it may cover your expenses if you are a pedestrian and hit by another driver while walking, and they don't have insurance coverage.

States Where UM and UIM are Mandatory

There are 18 states, plus Washington D.C., where UM and UIM are required. The chart below shows which states require the coverage, plus the liability minimums these states require.
StateBodily injury (BI) liabilityProperty damage (PD) liabilityPersonal injury protection (PIP)Uninsured motorists (UM)Underinsured motorists (UIM)
Connecticut$25,000 BI liability per person; $50,000 BI liability per accident$20,000 PD liability per accidentNoYesYes
Washington D.C.$25,000 BI liability per person; $50,000 BI liability per accident$10,000 PD liability per accidentNoYesNo
Illinois$25,000 BI liability per person; $50,000 BI liability per accident$20,000 PD liability per accidentNoYesYes
Kentucky$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accident$10,000 PIPYesYes
Maine$50,000 BI liability per person; $100,000 BI liability per accident$25,000 PD liability per accident$2,000 Medical PaymentsYesYes
Maryland$30,000 BI liability per person; $60,000 BI liability per accident$15,000 PD liability per accidentNoYesYes
Minnesota$30,000 BI liability per person; $60,000 BI liability per accident$10,000 PD liability per accidentNoYesYes
Missouri$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accidentNoYesNo
Nebraska$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accidentNoYesYes
New Hampshire; financial responsibility only but limits if you do purchase optional insurance$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accident$1,000 PIPYesYes
New York$25,000 BI liability per person; $50,000 BI liability per accident$50,000 liability for death per person; $100,000 liability for death per accident$10,000 PD liability per accident; $50,000 PIPYesYes
North Carolina$30,000 BI liability per person; $60,000 BI liability per accident$25,000 PD liability per accidentNoYesYes
North Dakota$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accident$30,000 PIPYesYes
Oregon$25,000 BI liability per person; $50,000 BI liability per accident$20,000 PD liability per accidentNoYesYes
South Carolina$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accidentNoYesYes
South Dakota$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accidentNoYesYes
Vermont$25,000 BI liability per person; $50,000 BI liability per accident$10,000 PD liability per accidentNoYesYes
Virginia$25,000 BI liability per person; $50,000 BI liability per accident$20,000 PD liability per accidentNoYesYes
West Virginia$25,000 BI liability per person; $50,000 BI liability per accident$25,000 PD liability per accidentNoYesYes
Wisconsin$25,000 BI liability per person; $50,000 BI liability per accident$10,000 PD liability per accidentNoYesMedpay

The Cost of Adding UM and UIM to your Insurance Policy

If your state doesn't mandate the UM and UIM coverage, adding it to your policy may not break the bank. And since UM and UIM fill in the financial gap left when another driver isn't properly insured, it may be worth it to you to take this action.
Personally speaking, I recently added this coverage to my own auto policy, which is not required in my state (Georgia). I was surprised at how little it cost to add UM, which is the price of a fancy coffee once a month. Granted, my insurance rates are based on my driving history, age, gender - all sorts of personal factors. But adding the coverage barely made a dent to my premiums.
If you do add the UM coverage to your policy, a standard insurance rule of thumb is to match your liability coverage. For instance, if you have $50,000 per person in bodily injury liability, $100,000 per accident for bodily injury liability, and $50,000 for property damage liability, then you would choose these same limits for UM.
The higher your net worth, and the higher amount of your assets, the more liability coverage you need to purchase. A licensed insurance agent in your state can walk you through the recommended options. The same is true for UM and UIM limits. However, this will affect the amount you pay for coverage too.
While everyone's rates are different, you too may be able to purchase the additional UM/UIM coverage for the minimal added cost to your policy.

Make sure your coverage is adequate

Another method of defense against uninsured/underinsured motorists is to make sure you are adequately insured. When contemplating adding UM and UIM coverage, it's a great time to review what you already have in place and confirm your limits are high enough.
As your net worth changes throughout your life, it's perfectly appropriate to adjust liability coverage limits. Remember, you will want to mirror your UM/UIM limits after your liability limits, so pay careful attention to this aspect of your policy.

FAQs

Doesn't my health coverage kick in if I'm hurt in an accident?
Your health insurance coverage may provide some relief in medical expenses payments, but only for you and after all auto insurance options have been exhausted. Your health insurance will not offer any financial assistance for any passengers involved in the accident, whether the other driver is at fault or not.
<faq question="Do I purchase UM/UIM for each vehicle on my policy, or does one coverage protect all my vehicles?" answer="Most insurance carriers require you to purchase UM/UIM for each vehicle separately. Only purchasing one coverage does not act as a "blanket" across multiple cars.">
If I have medical payment and personal injury protection, isn't that enough?
These two are great options to have on your policy, but the limits may not be high enough to cover a serious accident. Medical expenses can add up quickly, and medical payments and PIP coverage can fall severely short.

The Bottom Line

If you want to defend yourself from drivers who choose to drive uninsured or underinsured, adding UM and UIM coverage is one of the most cost-effective options. With 12% of the population driving around without insurance, not having this coverage may put you at additional financial risk.

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