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Part 2: Uninsured Motorist Coverage Terms

Now that you’re thinking about Uninsured Motorist (“UIM”) coverage from the previous parts of this series (the Introduction and Part 1), what do you need to consider in terms of coverage?

Talking with a reputable broker is a great place to start. But be wary of a few terms that you should always discuss, and as always, be aware that the laws of your state and the terms of your contract will affect your situation:

1. “Anti-Stacking” Provisions.

You decide to buy a $50,000 UIM policy, and you’re covered under a $500,000 umbrella with UIM coverage. So, you have up to $550,000 in UIM coverage, right? Probably not, if you read the fine print. Often, insurers add an anti-stacking provision, whereby the insurer won’t let you add (“stack”) multiple policies together to increase the total coverage. From your perspective, you pay premiums on two policies, so you should get covered under both. But insurers look at this as “stacking” the $50,000 limit and the $500,000 limit, and will use these terms to keep you limited to the highest single coverage limit.

The result is that you may end up paying multiple premiums on policies under which you may never be able to collect. So, be sure to ask about whether you can stack multiple policy limits before you get that additional coverage, and precisely when you’ll be able to draw on a particular policy.

Some states prohibit anti-stacking language, and some differentiate between intra-family stacking (between family members) and inter-family stacking (where the insureds are not related), because insurers could presumably account for the reduction in benefits from anti-stacking language by reducing rates, whereas when you are not family members, you are each necessarily paying a full premium. For example, the Ohio Supreme Court held that intra-family anti-stacking provisions were unconscionable under Savoie v. Grange Mut. Ins. Co. (1993), 85 Ohio St.3d 541, 709 N.E.2d 1161, because insurers “are attempting to prevent the full payment of two policy limits resulting from the full, unadjusted premium payment of two unrelated insurance policies.” This, the court reasoned, “is unconscionable. We do not believe that the legislature intended to sanction such a practice.” The General Assembly disagreed, overruling Savoie in 1994 by amending the Uninsured Motorist law (R.C. 3937.18). Since 2001, Ohio has no longer mandated UIM coverage offerings from insurance companies.

2. Property Versus Injury

Uninsured and underinsured coverage can cover bodily injury (including medical bills, lost wages, and pain and suffering) and property damage. You should consider that your medical coverage will not cover lost wages or property damage, so good medical insurance does not mean you should avoid UM coverage. But you should consider where your gaps in coverage are, and discuss them with your broker.

3. Pedestrian Coverage

Many policies will apply to you when you suffer damage from an uninsured motorist while you’re not even driving. Be sure to verify that the policy affords you this pedestrian coverage for an extra level of protection, especially if you frequently walk or bike (or, your family does).

4. Per-Person Versus Per-Occurrence

Some policies will be “combined” limits, others will be “split” between a per-person and a per-occurrence limit. You should consider whether it makes sense to have per-person limits on coverage if you are not going to be driving with people, since you’re essentially limiting the total coverage you have as a single driver.

Any other terms to look for, in your experience? Share your thoughts below! It’s quick and easy, and you may just help someone or get a question answered.

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