Uninsured/Underinsured Motorist Coverage

When you buy underinsured motorist insurance, you will need to choose a coverage limit. In many cases, you will want this coverage’s amount to match your bodily injury liability limits. So, if your bodily injury liability coverage limit is $200,000, then you will want at least that for your underinsured motorist coverage.

This coverage helps pay for your medical expenses if a driver hits you that does not have enough insurance. This includes a range of accidents that involve:

• A hit-and-run
• Someone rear-ending you
• Head-on collisions
• A driver backing up into you
• Getting sideswiped by another car

Your health insurance may overlap with UMBI and UIMBI coverage. In states where UMBI and UIMBI are optional, there are a few things to consider before passing on the coverages:

• Will your health insurance cover injuries sustained in an auto accident? Medicare and Medicaid may not pay out until other sources of insurance have been exhausted. If you have private health insurance, check with your health insurer to find out how medical expenses resulting from a car accident are covered.
• Does your health insurance have a deductible? Generally, there’s no deductible with UMBI and UIMBI. If you have a deductible with your health insurance, and it is high, it may be beneficial to carry UMBI and UIMBI.
• Will there be passengers in your car that do not have their own health insurance? Your UMBI and UIMBI coverage will protect those passengers.
• Does your health insurance cover lost wages? Your UMBI and UIMBI sometimes will, as well as other types of damages not protected under some health insurance plans.

The insured usually has the option of choosing the dollar limits of your coverage. For the bodily injury portion that covers your injuries, consider matching the amount of your Bodily Injury Coverage. Some states give you no other option but to choose identical limits.

EXAMPLE:

If your limits of liability are $50,000 per person/$100,000 per accident, consider choosing the same limits for UMBI and UIMBI. If you are hit by an uninsured driver, each injured passenger (including the driver) can collect up to $50,000. If two passengers collect the full $50,000, then you reached your $100,000 maximum per accident.

Your UMPD limit is a different (and much easier) story. You can select a limit that closely mirrors the value of your vehicle. If your car is worth $20,000, and you do not carry Collision Coverage, then you should consider that much in UMPD coverage.