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Do I Need Uninsured Motorist Insurance?

Do I Need Uninsured Motorist Insurance?

updated: Apr 10, 2017 –

Uninsured motorist insurance is an additional form of coverage that offers you protection in the event you are involved in an accident involving another motorist who is uninsured or under-insured. This coverage only comes into play when you get into an accident where you are not at fault. It will pay medical and repair bills when the motorist who would be normally required to pay, simply can not.

Uninsured motorist coverage is useful when you are dealing with two basic types of drivers: uninsured and under-insured.

Uninsured Motorists

Uninsured can mean several different things. The most obvious is that the driver simply does not have insurance. However, it can also mean that the driver’s insurance does not meet the minimum standards set forth by the state or that the insurance provider of that driver refuses to accept the claim for one reason or another. Hit-and-run drivers also fall under this category.

Under-Insured Motorists

An under-insured motorist is someone who does have at least the state minimum coverage, but their policy is not generous enough for the driver to cover the damages and bodily injuries caused to you in the accident where you were not at fault. In this case, an uninsured insurance policy would cover the difference of your damages, up to your predefined limit.

Below is a video produced by AllState that does an excellent job explaining what both Uninsured and Under-insured Coverages are all about.

https://www.youtube.com/watch?v=4d9Cztx6mJM

What are the Chances of Needing it?

A lot of drivers see uninsured motorist coverage as a luxury and some even consider it a waste of money. What are the chances of getting hit by an uninsured driver, right?

Unfortunately, the odds are actually fairly substantial. Recent reports have shown that the number of uninsured drivers can reach as high as 25.9% (1 out of 4 drivers). This means that if you are ever involved in an accident where you are not at fault, there is a good chance the at-fault driver will not have the necessary insurance to cover your financial losses.

According to a 2014 report from Insurance Information Institute, here are the ten states with the highest percentage of uninsured motorists.

  • 25.9% – Oklahoma
  • 23.8% – Florida
  • 22.9% – Mississippi
  • 21.6% – New Mexico
  • 21.0% -Michigan
  • 20.1% – Tennessee
  • 19.6% – Alabama
  • 17.0% -Rhode Island
  • 16.2% – Colorado
  • 16.1% – Washington

source – iii.org 

While it’s true that if you’re hit by an uninsured driver you can take legal action and take the other driver to court in order to pay for your damages, but this takes a lot of time and requires expensive lawyer fees. In addition, there will be some cases where the other driver simply does not have the money required to pay you and, while they will owe you on paper, that will not bring you any closer to having your car repaired or your medical bills covered.

That is why having uninsured motorist coverage on your policy can be a good idea. It can save you a lot of time and a lot of hassle. In addition, uninsured motorist coverage is a relatively inexpensive add-on. These are a few reasons why most institutions and research groups recommend that drivers include uninsured motorist insurance on their policy.

On the other hand, depending on the state you live in, you may not have a choice. In many states uninsured motorist insurance is a legal requirement.

States where Uninsured Motorist Insurance is Mandatory

  • Connecticut
  • Illinois
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Missouri
  • Nebraska
  • New Hampshire
  • New Jersey
  • New York
  • North Carolina
  • North Dakota
  • Oregon
  • South Carolina
  • South Dakota
  • Virginia
  • West Virginia
  • Wisconsin
  • Washington DC

(updated Feb. 2016) source – iii.org 

Uninsured Motorist and Full Coverage

When shopping for full coverage insurance, do not automatically assume that uninsured motorist insurance is included in a policy you are considering. While some companies do include uninsured motorist insurance as part of their full coverage packages, most don’t. It’s more common for providers to offer a minimum full coverage package in order to keep the price of their full coverage policies down. Minimum full coverage traditionally only includes: liability, collision and comprehensive coverage.