What is uninsured motorist coverage?
First thing is, to understand that this is supplemental coverage that you can buy on your policy. It’s an addition to the standard other coverages that you may have. You have liability, physical damage, comprehensive collision, other things like that. Then also underserved motorist is another one of those things. An uninsured motorist is typically found as an option for any of those policies you would have for something that moves. Think about that. If it’s stationary, typically won’t find it there, but if it’s something that you’ve got that moves, that is an optional coverage you can buy.
What insurance policies can I get this coverage on?
What are some of those policies? Number one is going to be your auto policy. On your auto policy, you could purchase uninsured motorist coverage. What about an ATV or four-wheeler or a side by side? Yes. With that policy, you can buy uninsured motorist coverage. What about a motorcycle, a boat, a jet ski? What about a motor home? With all those policies you can buy uninsured motorist coverage as well as also on your umbrella policy. Remember, it’s all the policies that give you protection for things that move. It’s optional. You don’t have to buy it, but it is really good coverage, very broad coverage that could help you in a time of need.
What does it do?
I’m going to give you basically a definition of it to some degree, a layman’s term definition. An uninsured motorist is liability coverage that takes care of medical bills, bodily injury, rehabilitation, and also property damage. Whenever there’s a claim that happens and there’s no other insurance to take care of those medical bills or property damage or whatever it is. Again, it’s a coverage that you can buy that’s going to take care of bills that you incur because of an accident that’s not your fault and there’s no other insurance or not enough insurance to take care of that.
Let’s give a couple of examples that maybe help you to understand because that’s kind of a mouthful. Here are some different situations that come into play. Let’s say that you’ve got your vehicle. You’re involved in an auto accident. It’s not your fault at all. It’s the other people, the other people hit you. Well, they don’t have insurance or maybe they don’t have enough insurance. Well, in those situations, your uninsured motorist can take care of your bodily injury, your medical bills, any prescriptions that you may have because of that injury, if you have some sort of surgery or you have rehabilitation because of that. It’s going to take care of all of that for you. What about your vehicle? If you have damage to it, it’s going to take care of that too. It’s going to take care of whatever the property damage is to your vehicle or whatever else that may have been damaged in that.
What about another situation. Let’s say you’ve got kids and your kids are off, maybe they’re in high school or something like that. They’re off with some friends and friends are going to a movie or something like that or going to another friend’s house and they get hit. They get T-boned in an accident at an intersection. They’re completely in the right, but the other party was in the wrong and they hit them in the side. Causes damage to your child, to the other people that are in the vehicle. Well, since you have uninsured motorists on your policy, it’s going to follow your child wherever they go and give them protection so that you can rest assured that their medical bills are going to get taken care of. They’re going to get the care that they need to make sure that they can get fully recovered. It’s going to follow them no matter where they go, it’s going to make sure that they… so they don’t just have to be in your car. They don’t even have to be in a car. They can be a pedestrian on the street and get struck by a vehicle and it will still take care of them. It’s very robust, very great, and it’s very good coverage to take care of those different things.
Won’t My Health Insurance Cover That?
You may say, okay, well, Beaux, I understand. Yes, it sounds great, but I’ve got health insurance that should take care of it. Yes, you do. That will take care of your medical bills. Typically we have large deductibles that may not fill in that gap. This can help fill in that gap. What about other people that maybe are riding with you? Maybe you’ve got some of your kids’ friends that maybe don’t have adequate health coverage. Well, this will help take care of them too. Or maybe a friend or whoever else that’s maybe traveling with you, or just riding with you in the car. This will help protect them also.
Isn’t everyone supposed to carry insurance?
Everybody’s supposed to have car insurance. That’s just a fact. Well, unfortunately, the fact is everybody does not have insurance. For whatever reason, a lot of people just do not have it. Maybe they can’t afford it. Maybe they just forgot. Whatever the reason is, the fact is they just don’t. In a lot of different states, the statistics on how many people don’t have it go all over the place. Inside some of the states like Louisiana, Arkansas, Mississippi, Texas, those numbers range anywhere from 10% up to 25% that do not have insurance. Think about that. Potentially, while you’re driving along in your car and you look around, potentially one of the four cars does not have insurance. That’s 25%. Maybe you’re in a state or a region where it’s more. That number’s not as significant, but still, it’s going to be at least 10%.
Across the United States, it is anywhere from 10 to 30% of the people do not have insurance. What happens in those situations if you get in an accident with one of those people, and there’s no insurance? Either one, you’ve got to hope you’ve got some other insurance that’s going to care of that. Two, you’ve got to file it underneath your collision coverage if there’s vehicle damage, and that’s going to count as a claim against you. Or three, you’ve got to pay for that out in the pocket. That doesn’t feel right, does it?
Fine.. I’ll just sue them!
Sure, you can sue them. But if they’re not carrying insurance, they probably don’t have any assets that you can go against, or the ability to be able to take care of those bills. You’re going to be on the hook for it. This is a way that you can help ensure that that does not happen.
What about filing it under collision?
Yes. You can file a claim like that underneath your own collision for the damage that happens to your vehicle. A couple of things to think about. One of them is you’re probably going to have a higher deductible. The deductibles on collision typically are anywhere from 1000 to 2500 or even $5000. Whereas on an uninsured motorist claim, it may be only $250 or $500, so it’s a lower deductible. Another thing is if you have a collision claim that you file underneath there, even though it’s not your fault, I’m sorry to tell you, but it’s going to be a chargeable claim against your policy. You’re going to pay for that in increased rates over the next three to maybe five years. I know that doesn’t feel right. That’s just the system that we have, but I just want you to know and understand what could happen there. If you file that claim underneath uninsured motorist coverage, because they don’t have enough insurance to take care of you, well, that’s not going to be a chargeable claim against you, and that’s not going to affect your insurance rates as a collision claim would.
2 TYPES OF UNINSURED MOTORIST COVERAGE
Let’s talk about the two different parts of an uninsured motorist. There’s BI and PD is what we usually say inside the insurance world.
Bodily Injury (BI)
This includes medical bills, prescription drugs, doctor visits, any sort of surgery, any sort of rehabilitation that you have to have. All those things fall underneath BI or bodily injury.
Property Damage (PD)
It is anything that is a tangible thing that gets damaged to it. Not bodily injury, but property damage. It could be your house, a fence. It could be your car. All those different things fall underneath property damage. Maybe the contents you have in there, your cell phone, laptop, maybe you’ve got a bunch of groceries in the trunk of your car that gets destroyed because of an accident. All that stuff is covered underneath property damage. You buy these two coverages, you have to buy bodily injury first, then you can add on property damages in stages there. They’re pretty inexpensive though, typically, to purchase and to add to your policy. All you’ve got to do is just call your agent and just ask them how much it would cost to add that.
LIMITS
While you’re thinking about that, let’s think about the limits that you buy. You can buy the same limits as what you have on your liability insurance for your personal auto, or you can buy lower limits. It’s really up to you. The cost between the two types is not very much. I usually just suggest you get the same limits. That way there’s no question about having enough limits there to make sure that you get covered adequately. Because the fact is you just, you don’t know. You don’t know what the accident’s going to be like. Use the same logic in determining your uninsured motorist liability limits that you use to determine how much liability coverage you bought. It’s about protecting yourself, protecting your assets, and making sure that you don’t have some sort of a claim that’s going to cause you financial distress, if not financial ruin.
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Beaux Pilgrim, CEO
Beaux Pilgrim
Reed Insurance