Uninsured and underinsured motorist coverage is useful for many drivers. It is also usually inexpensive as an add-on policy for your overall insurance plan. Still, it is often misunderstood.
To better understand what uninsured and underinsured motorist coverage is and how it can benefit you, read on.
Understanding Uninsured and Underinsured Motorist Coverage
Before we dive right into definitions, let’s talk about something that many drivers don’t know:
A large percentage of drivers you see on the road are not insured.
This doesn’t mean that they simply don’t have the correct insurance or that they haven’t paid their most recent premium. It means that they have absolutely no insurance. They never signed up. They are driving uninsured. Approximately 13% of drivers in the U.S. were completely uninsured in 2015.
How Uninsured Motorists Affect You
As a legal driver, you must always have insurance for your vehicles. Not having insurance and driving anyway is always illegal.
At the same time, you may be aware that the requirements for insurance differ. These differences vary by state.
In Wisconsin, you need two types of insurance:
- Liability insurance
- Uninsured driver insurance
Let’s talk about liability insurance.
Basically, having liability insurance means that if you are found at fault for an accident, your insurance will pay for the other party’s medical expenses and property damages. This also means that there are actually two sub-types of liability insurance that you will carry:
- Bodily injury liability insurance (BI)
- Property damage liability insurance (PD)
How much your insurance pays for these damages depends on your policy limits.
Drivers who do not have liability insurance are putting you at risk.
Let’s say, for example, that you get into a collision in downtown Columbus with an uninsured driver. You and one of your passengers is injured. Your car’s windshield is broken, and your passenger’s side door is completely smashed in.
Because the other driver was at fault but does not have liability insurance, they won’t be able to pay for your damages. The damages that you would otherwise deserve would include:
- Medical expenses
- Compensation for lost wages for time you have to take off work
- Pain and suffering damages
- Property damage costs for damage to your car
Are Uninsured Drivers Simply Off the Hook?
No. Again, it is illegal to drive without insurance. Someone who causes an accident like the one in the example above will face serious legal issues.
Still, you are out of luck in these situations unless … you have something called uninsured motorist insurance or “UM coverage.”
What Is UM Coverage?
UM coverage is a type of insurance coverage you buy. However, contrary to popular belief, it does not protect uninsured drivers. It protects you from uninsured drivers.
Specifically, UM or uninsured motorist coverage covers you if you are injured by an uninsured motorist. It generally covers:
- Medical expenses
- Lost wages
- Pain and suffering
* UM coverage does not cover property damage. In some states, this type of property damage could be covered by an add-on uninsured motorist property damage (UMPD) policy. However, UMPD policies are not offered in Wisconsin.
Depending on your policy, UM coverage may also pay bodily injury damages for:
- Your passengers at the time of the accident
- Household members who are driving your insured car
- Other approved individuals driving your car
It is mandatory to have uninsured motorist coverage in the state of Wisconsin.
What About Underinsured Drivers?
Some drivers only have the minimum amount of liability insurance required. These drivers are called underinsured drivers. If you like, you can purchase underinsured motorist coverage (UIM coverage) to give you added protection from drivers with low limits on their BI liability insurance.
Call Anton Insurance or stop into our Columbus office today if you have questions about UM and UIM coverage.