What Is Uninsured/Underinsured Motorist Coverage?

What’s the most important coverage to include in your auto insurance policy?

Uninsured/Underinsured Motorist Coverage

The Reality of Uninsured and Underinsured Drivers in Texas

Unfortunately, too many Texas drivers don’t have any automobile insurance or don’t have enough insurance. Approximately 20% of Texas drivers don’t have any insurance at all. And about 50% of Texas drivers only carry the state-required minimum coverage of $30,000.00 of insurance.

What does this mean? It means that for many victims of car wrecks, the driver who caused the wreck won’t have enough insurance to fully compensate the victim of the wreck.

The Importance of Uninsured/Underinsured Motorist Coverage

That’s where uninsured/underinsured motorist coverage (UM/UIM) comes into play.

When you buy your auto insurance, you have the option to purchase uninsured/underinsured motorist coverage. Like most insurance coverages, it is not unlimited. You only have as much insurance as you actually purchase. If you purchase it, you have at least $30,000 of coverage, but you can have much more.

Uninsured/underinsured motorist coverage protects you if you’re in a wreck caused by someone who doesn’t have insurance or doesn’t have enough insurance to fully compensate you for your losses.

If the other driver just doesn’t have insurance (or is a hit and run driver), then your uninsured/underinsured motorist coverage kicks in and pays you the full value of the claim, up to the amount of insurance you bought.

If the other driver has insurance, but it’s not enough to fully compensate you for the full value of your claim, then the underinsured motorist coverage kicks in. This coverage will pay you for the value of the claim that exceeds the amount of insurance the other driver has, up to the value of your policy.

What does this look like in the real world?

Let’s say you purchased $50,000.00 of UM/UIM coverage and you’re in a wreck with someone without insurance. Then your insurance company will pay for the value of the your claim up to the $50,000.00 limits. If your claim is worth $10,000.00, then your policy will pay the $10,000.00. If your claim is worth $40,000.00, then the policy will pay $40,000.00. But if your claim is worth $100,000.00, the policy will only pay $50,000.00 because that’s all the insurance you bought.

If you’re hit by someone who has insurance, but not enough to fully compensate you, then it’s a little more complicated. Let’s say you bought the same $50,000.00. And let’s say the other driver has $30,000.00 of insurance, and your claim is worth $50,000.00. In this situation, the other driver’s insurance will pay $30,000.00. Once that is finalized, then your underinsured motorist carrier will pay you an additional $20,000.00 (the $50,000.00 value of the claim minus the $30,000.00 paid by the other driver’s insurance).

Who does UM/UIM cover?

UM/UIM coverage will protect you in several situations. First, your coverage protects those in your car. If your car is hit by someone else, then UM/UIM will potentially cover anyone who is in your car.

Second, the um/uim coverage follows you. For example, if you are in a wreck as a passenger in a friend’s car, then your own um/uim would potentially cover you. And you don’t even need to be in a car. If you’re a pedestrian, riding a bike, or, as one famous case says, sitting in a rocking chair on your front porch, and someone hits you with a vehicle, then your um/uim coverage can come into play.

Protect your family with UM/UIM coverage

You should go review your auto insurance coverage to make sure you have UM/UIM coverage. Unlike a lot of coverages, it protects you and your family when you’re in a wreck.

Conclusion

Uninsured/underinsured motorist coverage is one of the most important types of insurance you can buy. If you have questions about your coverage or need help after an accident, contact us today. We’re here to ensure you and your family get the protection and compensation you deserve.

For additional information, check out these articles:

Personal Injury Protection and Uninsured/Underinsured Motorist Coverage
What happens if I’m hit by a driver without insurance or without enough insurance?
Does uninsured/underinsured motorist coverage cover hit and runs?
Texas uninsured/underinsured motorist coverage frequently asked questions