Why Should You Buy Uninsured Motorist Coverage?

July 24, 2012 at 2:45 pm | Posted in Insurance | 1 Comment

Has your insurance agent recommended Uninsured/Underinsured Motorist coverage to you?  Have you thought to yourself “Why should I buy coverage because someone else isn’t properly insured?” or “I have medical insurance, if I need it?”  Well guess what?  This coverage is there for your protection not theirs.

First, let’s start with the definitions of UM (uninsured motorist) or UIM (underinsured motorist) coverages.

  • Uninsured Motorist (UM) coverage:  “Coverage for bodily injury (BI) and, in some states, property damage (PD) incurred by an insured when an accident is caused by a motorist who is not insured. This coverage allows an insured to collect from his or her insurer as if it provided liability coverage for the negligent third party.” 1
  • Underinsured Motorist (UIM) coverage: “Coverage for bodily injury (BI) and, in some states, property damage (PD) incurred by an insured when an accident is caused by a motorist who is not sufficiently insured.” 2

Now let’s demonstrate with a hypothetical automobile accident.

You are driving along on a beautiful day, when you are hit by a vehicle NOT COVERED by insurance. (You may think this is uncommon, but according to the Insurance Research Council (IRC), 1 in 7 U.S. drivers do not carry auto insurance coverage and are therefore uninsured.)

Back to our claim story; you are hit by an uninsured motorist. Unfortunately, you have serious injuries and that require a hospital stay and surgery.  Because the other driver is not covered by insurance, your auto policy will be where we begin to pay your bills.

  1. If you live in a “no-fault state” (and in New York we do) your personal injury protection (PIP) will be the first coverage to provide help for paying medical expenses (whether you have personal health insurance or not), loss of income, and funeral expenses.
  2. If your medicals bills exhaust your PIP coverage, the next policy to take over would be your health insurance policy.  Considering the rising cost of health insurance today, many people have chosen not to carry health insurance and in some cases health insurance policies have a life time limit of coverage.  UM coverage is an affordable solution in these cases.
  3. Now let’s assume this accident has left you unable to work and you don’t carry any disability insurance.  Your medical bills may be taken care of but what about your everyday expenses?  Your medical policy won’t cover those expenses, but you are unable to work and collect a pay check.  This is where Uninsured/Underinsured Motorist coverage comes in.

UM and UIM protect YOU and your assets from the very real possibility you are involved in an auto accident with someone who doesn’t carry auto insurance or who doesn’t carry adequate insurance!  For additional information please contact one of the NSA Group offices  or your insurance agent.

Additional information:

1 IRMI. “Uninsured Motorists (UM) Coverage.” – Insurance Glossary. N.p., n.d. Web. 18 July 2012. <http://www.irmi.com/online/insurance-glossary/terms/u/uninsured-motorists-um-coverage.aspx&gt;.

2 IRMI. “Underinsured Motorists (UIM) Coverage.” – Insurance Glossary. N.p., n.d. Web. 18 July 2012. <http://www.irmi.com/online/insurance-glossary/terms/u/underinsured-motorists-uim-coverage.aspx&gt;.

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1 Comment »

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  1. Thank you so much for sharing this very informational article about these matters. It surely will help us who eventually are into that case/situation. I have also read your other posts and I was so thankful because you took an effort in sharing this to us when in fact you could just keep these helpful facts for yourself. Thank you =)


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