Understanding Uninsured Motorist And Underinsured Motorist Insurance Coverage

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Copyright © 2010 Quinton Becker


Uninsured Motorist (UM) and Underinsured Motorist Insurance (UIM) are often the most under-appreciated and misunderstood forms of insurance available to consumers.

I recall as a child, an uncle who had worked for an insurance agency declared to my parents that Uninsured Motorist (UM) and Underinsured Motorist (UIM) insurance coverage were a complete waste of money. I know that we are supposed respect our elders, but I must respectfully disagree with my uncle. Let me explain why.

An Uninsured Motorist is defined as any driver who did not have any insurance at all, had insurance that did not meet the state-mandated minimum liability requirements, or whose insurance company denied the claim to the insured motorist, and the driver was financially unable to pay for medical expenses or damages on their own.

According to the Insurance Research Council, the estimated number of uninsured drivers may reach as high as 25% of the drivers on the road today, across the United States.

Underinsured Motorist refers to a motorist, who had the state mandated minimum liability insurance and was at fault, but their insurance policy will not provide enough coverage to cover the full bodily injury costs or property damages of everyone involved in the accident.

Under the umbrella of UM and UIM insurance, you will find two different options: Uninsured Motorist Bodily Injury (UMBI) and Uninsured Motorist Property Damage (UMPD). While it is possible to purchase UMBI insurance separate from UMPD insurance, you will not be able to purchase UMPD insurance without also purchasing UMBI insurance.

UMBI insurance will pay for injuries to you or your passengers, when there is an accident that is the other person's fault and the person-at-fault is either uninsured or underinsured. A hit-and-run driver is also considered to be an uninsured motorist, as it relates to bodily injury and UMBI insurance.

UMPD insurance will pay for property damages to your vehicle, when the party-at-fault has no insurance or not enough insurance to cover your property damage repair or replacement expenses.

When purchasing Uninsured Motorist (UM) and Underinsured Motorist (UIM) insurance coverage, be sure to verify whether it also covers UMPD expenses and the level of coverage offered with the plan. The standard uninsured motorist insurance package will vary from company to company. So ask for specifics about the uninsured motorist insurance package that is being offered to you.

Insurance agents, with most auto insurance companies, are required to make a consumer sign documentation that affirms the consumer's rejection of Uninsured Motorist Insurance Coverage. This provides a measure of protection to the insurance company, when the consumer realizes that his or her normal insurance policy will not cover bodily injury or property damage, when the fault for the accident is the result of the uninsured or underinsured motorist.

With up to 25% of the motorists on our roads being either uninsured or underinsured, the chances of being involved in a collision with an uninsured or underinsured motorist is 1-in-4.

Consumer advocates suggest that the average person will be involved in at least one traffic accident during the course of his or her lifetime. So the day will likely come that you will be involved in a traffic accident.

According to the National Highway Traffic Safety Administration, there were more than 6 million auto accidents on American roads during 2009. For those of you who have not really thought about it, that means that there was one traffic accident in the U.S. during 2009, for every 50 residents of the United States.

Another statistic worth noting is that nearly 34,000 people were killed in traffic accidents during 2009, in the United States.

I don't know about you, but I would prefer to do my gambling in a casino, where I can have absolute control over how much money I am willing to lose. I certainly don't want to gamble with my personal finances, while I am behind the wheel of my car, by assuming that the guy in the next car has the liability insurance that he is required to have. With a 1-in-4 chance of coming out on the short end of the stick in a traffic accident, personally I think that those kinds of odds are just too high to risk saving a few dollars by rejecting Uninsured Motorist Insurance Coverage.

As for you, that is your choice... You can choose to reject Uninsured Motorist Insurance Coverage to save a few bucks on your insurance premium or not...


About the Author:
When comparing auto insurance quotes, be certain that you are always comparing apples-to-apples. When you understand what your auto insurance quote covers, you can make an educated decision about which auto insurance company is offering you the best value for your money. You can get auto insurance quotes from several local agents at: http://maxroo.com/updates/auto-insurance-quotes/ Oklahoma residents can get quotes and find insurance agent phone numbers at: http://CheapOklahomaAutoInsurance.com/ Written by Quinton Becker.