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Uninsured Motorist Insurance Series, Part 1: UIM Coverage Basics

Most people have auto insurance—you’re likely legally-obligated to have it. The better your policy, the higher your coverage, the more protected you are, right? Wrong. In many ways, you’re protecting other drivers, not yourself, or your family. Why? Because when you’re hurt in a car accident, traditional liability insurance pays the other person if you’re the one at fault. But when the other driver hits you, you’re counting on the other driver to have a great policy to cover the medical costs you or your family suffers. That’s quite a gamble: betting that the same driver who was careless enough to hurt you or your family was careful enough to get a great insurance policy. Examples abound of uninsured motorists.

The answer is uninsured and underinsured motorist (“UIM”) coverage, which can be the most important insurance you’ll ever buy. In fact, some states (formerly, Ohio) mandate that insurers offer this coverage. If you’ve already encountered an uninsured motorist, you know the feeling. Read on and share your comments.

What are the types of insurance? Here are some basics you may already have or want to know about:

  1. Liability (auto): covers the costs of your own liability to other people whom you hit;
  2. Collision (auto): covers the cost of repairs to your vehicle, sometimes without regard to fault;
  3. Uninsured/Underinsured Motorist: Covers damage and injury to you or the covered family members based on someone else’s fault, often including when you’re injured as a pedestrian;
  4. Umbrella/Excess Coverage: can be vertical (pays in excess of plans you already have, based on the coverage of those plans) and/or horizontal (fills gaps between coverage you have), or—the true umbrella policy—both;
  5. Health Insurance: I mention this because your injuries may be covered under a health plan, but consider the differences in cost-by-coverage. A little Uninsured Motorist coverage can cost very little to add peace of mind, and you might have gaps in health insurance if you lose your job.

Now, some people will be quick to point out that regular ‘ole liability coverage does protect you and your family, and they’re right, to a point. It protects you from your own liability to other people, so that if you hurt someone else through your own mistake, you won’t be stuck with the financial liability of whatever damage or injury you cause. Similarly, if you’re injured, health insurance may cover some or all of the injuries. But for a serious crash involving severe injury or even death, your health coverage may

But that’s only half the story. When the other driver is the one at fault, you look to their policy to cover your injuries, and that is a risk: you’re betting that the same driver who was careless enough to hurt you or your family was careful enough to get a great insurance policy. It’s a bet you don’t have to take, and one many people never think about.

The answer is to protect yourself, adding the same protection for yourself that you provide to others, through underinsured or uninsured motorist coverage. Now, I’m not an insurance salesman, I’m a lawyer who works at a firm that is often representing injured people against insurers who don’t want to pay their fair share. But sometimes those insurers’ “fair share” really is too little: like in the case of a person who injures your family in a car crash, and only has the minimum coverage. Or in the case of a hit-and-run, where you never know who the driver was. Once that insurance runs out, there often is little—if anything—you can recover to pay those hospital bills, or for the physical therapy you need to walk again. That’s what UIM insurance is for.

Have you had an experience with an uninsured motorist? What types of coverage do you have, or recommend? Have you had clients who had to rely on UIM insurance in the past? Share your comments below!

Next up, Part 2: Uninsured Motorist Coverage Terms.

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