What is Uninsured Motorist Insurance?

uninsured motorist

Uninsured motorists make up a significant percentage of American drivers. According to the Insurance Research Council’s latest report, uninsured motorists accounted for one out of every eight drivers in the U.S. in 2021. 

If you’re involved in an accident caused by an uninsured driver, having an uninsured motorist policy could protect you and your passengers by reducing the financial burden of the crash. Investigate uninsured motorist policy benefits, types, requirements, and coverage considerations to help you decide on the right policy. 

What is an Uninsured Motorist? 

An uninsured motorist is a driver who doesn’t have proper auto insurance to cover a vehicle collision that they caused. An uninsured motorist may not have any type of car insurance at all. 

When a motorist does not carry insurance or carries insurance that doesn’t meet the required minimum liability coverage amounts in their state, they increase the cost of insurance for other drivers. Without insurance, these motorists cannot cover medical and other auto accident-related expenses when involved in a collision. 

In some cases, an at-fault driver’s insurance company might have gone out of business or be unable or unwilling to pay the accident victim’s claims. If this occurs, the at-fault driver is considered uninsured. Additionally, in a hit-and-run crash, the at-fault motorist is automatically labeled uninsured in some states.


How Can Having Uninsured Motorist Insurance Help Me?

Without uninsured motorist insurance, you might not receive an insurance settlement payout if you’re involved in an accident with an uninsured, at-fault driver. Uninsured motorist policies protect you and your vehicle’s other occupants by covering the following bills and expenses: 

  • Lost wages if you and your passengers are out of work after the accident
  • Monetary compensation for pain and suffering from the collision
  • Hospital and other medical care
  • Car repairs (only covered in certain states)
  • Funeral expenses


What Are the Main Types of Uninsured Motorist Insurance? 

Uninsured motorist insurance is a grouping of four different insurance policies

  • Uninsured motorist bodily injury coverage: Pays for injuries caused by the uninsured motorist
  • Uninsured motorist property damage coverage (available in some states): Pays for hit-and-run accidents and vehicle damages caused by uninsured drivers
  • Underinsured motorist bodily injury coverage: Pays your medical bills and lost wages when an at-fault driver doesn’t have sufficient liability insurance
  • Underinsured motorist property damage coverage: Pays for damage to your vehicle that’s caused by an at-fault driver with insufficient liability insurance


Am I Required to Have Uninsured Motorist Insurance? 

Many states require you to carry uninsured motorist coverage, and some states mandate uninsured and underinsured motorist coverage for all drivers. For example, Connecticut, Wisconsin, and Illinois require uninsured motorist insurance, and drivers in North Dakota, South Dakota, Vermont, and Nebraska must have uninsured and underinsured motorist policies. 

In total, 20 states require uninsured or underinsured motorist coverage for drivers. 


How Do I Read My Uninsured Motorist Coverage Limit Information?

As you compare insurance policies, you’ll see coverage limits expressed as a series of two numbers. For example, your policy might list a limit of 25/50. This means that the policy provides $25,000 of bodily injury coverage for each person injured in the collision. Additionally, it offers a maximum of $50,000 of bodily injury coverage per accident.

In this example, your insurance company pays out a maximum of $50,000 in injury payments for the accident. If your car had three occupants who each had $25,000 in injuries, your policy would still only pay $50,000 for the injuries caused by the crash. After that money has been used, health insurance may cover some or all of the remaining medical costs.  


What Should I Consider When Shopping for Uninsured Motorist Policies? 

When looking for uninsured motorist coverage, it’s helpful to consider your state laws, the percentage of uninsured drivers in your state, and any additional auto insurance you may have.


  • State laws 

Before you begin your search for uninsured and underinsured motorist coverage, it’s a good idea to examine the laws in your state. Check which type of uninsured motorist insurance you may be required to purchase. You should also find out the minimum coverage limits mandated by your state.

For example, in Vermont, drivers must carry $50,000 of bodily injury coverage per person and $100,000 of bodily injury coverage per accident. In addition, they must have $10,000 of coverage for property damage. Vermont requires uninsured and underinsured motorist coverage, and these coverage amounts are the minimum requirements for both policies.


  • Your state’s percentage of uninsured drivers

After checking your state laws, you may want to look up the percentage of uninsured drivers in your state. Mississippi, Michigan, Tennessee, New Mexico, Washington, and Florida each have an estimated percentage of uninsured drivers that’s more than 20%. 

Minnesota, Hawaii, and Nebraska have percentages under 10%, and Maine, New York, Massachusetts, and New Jersey have rates under 5%. You can use this information to determine the type of coverage you’d like and the coverage limits that give you the most peace of mind.


  • Your existing auto insurance

Many drivers have collision insurance, comprehensive insurance, or both. Even though these insurance policies provide valuable protection, uninsured motorist coverage is still recommended for most drivers.

If an uninsured driver hits you, collision coverage will pay for damage to your car, but it won’t pay for any medical expenses for you or your passengers. In addition, it doesn’t cover damage to houses or other types of property that could have been involved in the crash.

Comprehensive coverage pays for damage from vandalism, theft, and natural disasters. It doesn’t cover any of the expenses from auto accidents, including those caused by uninsured motorists. 

In many cases, uninsured motorist coverage is your best protection from bodily injury and property damage expenses that may result from a crash. 


Where Can I Find Out More About My Uninsured Motorist Coverage Options?

To learn more about your options for uninsured motorist coverage, visit Finance is us. We can provide information about your state’s insurance products and services. We can help you understand more about the coverage limits suitable for your needs. 


Disclaimer: All content on this site is information of a general nature and does not address the circumstances of any particular entity or individual, nor is the information a substitute for professional financial advice and services.

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