What Is Uninsured Motorist Coverage (and Do I Need It)?

If you’re like almost 90% of motorists, you have some auto insurance to cover you, your passengers, other motorists, and your personal property in the event of an accident, which is important because the vast majority of people get into a car accident at some point in their lives. In fact, by one industry estimate, drivers average a collision claim every 17.9 years.

Auto liability insurance, which covers bodily injury and property damage when you’re at fault for an accident, is required in every state except New Hampshire, according to the Insurance Information Institute.

Unfortunately, even if you live in a state that requires auto liability insurance, and you are in full compliance with the law, you can find yourself in financial trouble if you get in an accident. Why? Because even states with compulsory insurance have issues with uninsured motorists, and if you get in an accident with an uninsured (or underinsured) driver, you could find yourself on the hook for repairs, damages, and more. That’s when having uninsured motorist insurance comes in handy.

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What Is Uninsured Motorist Coverage?

Uninsured motorist (UM) coverage is an add-on to your insurance policy that covers medical and repair expenses if you get into an accident and the driver at fault doesn’t have car insurance.

Underinsured motorist coverage is similar, but kicks in when the at-fault driver’s car insurance has liability limits that are too low to cover all the damages and expenses they’re responsible for.

Either situation can leave you out of luck when it comes to getting payments for your damaged vehicle, medical expenses, or other accident-related issues. There are two basic types of uninsured motorist coverage:

  • Uninsured motorist bodily injury coverage applies to medical expenses, lost wages, and pain and suffering for you and anyone else in your vehicle at the time of the accident. It may also cover the gap between the other driver’s liability insurance and your costs. DMV.org reports that this type of uninsured motorist coverage typically comes with a split limit, meaning that coverage amounts vary depending on whether the claim is per person or per accident — for example, $15,000 per person or $30,000 per accident. Motorists can also opt to purchase a combined single limit policy, which pays out a set amount per accident.
  • Uninsured motorist property damage coverage covers damage to your property in the event that you or your belongings are involved in an accident with an uninsured driver. UMPD would cover repairs to your car and anything you had in your car at the time of an accident, but would also cover damage to your property—for example, repairs to your landscaping should a car jump the curb and tear up your lawn or fence. DMV.org notes that uninsured property damage coverage isn’t required or even available in every state.

How Does Stacking Work?

If you insure more than one car on your policy, you may have the ability to “stack” your uninsured or underinsured motorist coverage in the event of an accident.

For example, if you own two cars that have uninsured motorist insurance coverage at $10,000 each, and one of those vehicles is damaged in an accident in which the at-fault driver is uninsured, you can apply the coverage from both of your cars ($20,000 total) to the single accident.

Note that if you decide to stack insurance policies, you’ll likely see an increase in your premiums, and stacking coverage isn’t permitted in some states.

Do I Need Uninsured Motorist Coverage?

If you live in a state that requires uninsured motorist coverage, obviously it’s in your best interests to comply with the law. Currently, some form of UM coverage (or financial responsibility) is required in 20 states — Connecticut, Illinois, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Virginia, West Virginia, Wisconsin — and the District of Columbia. Eleven states also require underinsured motorist coverage. States set different minimum liability limits, as well.

Sharp-eyed readers might have noticed that New Hampshire is among the states that require some form of underinsured motorist coverage. While New Hampshire does not require drivers or vehicle owners to purchase any specific type of car insurance, it does require them to prove their ability to pay for costs associated with an accident. Uninsured drivers who can’t come to an agreement with the other party in an accident with costs exceeding $1,000 can make restitution directly to the New Hampshire DMV to avoid the suspension of their driving privileges.

But, what about everyone else? If you live in a state that doesn’t require uninsured motorist insurance coverage, obviously you’re not legally obligated to carry it.

However, one look at the Insurance Research Council’s 2017 study on states with the most uninsured motorists might change your mind. For example, over a quarter of drivers in Florida were uninsured in 2015, as were one in five drivers in Tennessee, Michigan, and New Mexico.

Other reasons you might want to consider uninsured motorist coverage include:

  • Your state’s minimum liability coverage is unusually low.
  • You have a valuable vehicle that will be expensive to repair or replace.
  • You want hit-and-run driver coverage.
  • You want coverage for being a pedestrian who is hit by a car.
  • You’re uncomfortable with taking the risk of being hit by an uninsured driver.

How Much Does Uninsured Motorist Coverage Cost?

Adding uninsured or underinsured motorist coverage to your policy will increase the cost of your car insurance premiums — but not by a whole lot.

While the price of uninsured motorist coverage varies by insurance provider and by state, a 30-year-old driver in California with an average annual car insurance cost of $1,163 will pay an extra $112 a year, or less than $10 a month, for uninsured motorist coverage, bringing their annual premium to $1,275.  Drivers in Illinois ($30 a year) or Pennsylvania ($66 a year), meanwhile, can expect to pay even less for the protection.

Nobody wants to pay more for car insurance, but it only takes one driver without adequate coverage to cause you a major financial headache that lasts long after an accident. If uninsured motorist insurance coverage is available in your state, and won’t add a whole lot to your annual premium, you might want to take advantage of it.

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