Paying too much for someone else’s insurance?
Uninsured/Underinsured Motorist Coverage
When purchasing or renewing your auto insurance policy in San Antonio, it’s important to understand different types of coverage options. One aspect of auto insurance that is often misunderstood is uninsured/underinsured motorist coverage.
In Texas, motorists are financially responsible for damage they cause when behind the wheel. When the other driver involved in an accident has purchased adequate insurance coverage, generally no issues arise when it comes time to pay the bill. Unfortunately, not everyone complies with the law. That’s where uninsured/underinsured motorist coverage kicks in.
To really understand how uninsured/underinsured motorist coverage works, let’s break it down:
Uninsured Motorist Coverage
Although every state in the U.S. requires drivers to have some minimum levels of auto insurance coverage, it’s estimated that 12.6 percent of drivers nationwide are driving without any auto insurance at all (source: Insurance Information Institute.)
Here in San Antonio, TX, we’re above average. A 2014 study reported that 14.76 percent of Bexar County drivers (one in six) didn’t carry any auto insurance. Unfortunately, this is one area where we don’t want to be above average. Here’s why: If you are in an accident with an uninsured driver, you could find yourself in a nightmare scenario of having to pay for your own injuries and property damage out-of-pocket
When you purchase optional uninsured/underinsured motorist coverage, the “uninsured” portion protects you against this scenario. If you are in a hit-and-run accident, or an accident with someone who hasn’t purchased insurance, your policy will provide coverage to protect you from unforeseen medical costs.
Underinsured Motorist Coverage
The other half of uninsured/underinsured motorist coverage provides protection from those drivers who don’t have enough auto insurance coverage.
Minimum coverage required by law varies from state to state, but often the minimum simply isn’t enough to cover property damage and medical expenses that can arise out of an accident. Underinsured motorist coverage kicks in when the other driver involved in an accident didn’t have enough coverage to handle the resulting costs of the insurance claim. It is designed to provide bodily injury coverages for both the driver and their passengers, up to the policy’s limits.
Elements and Features of Uninsured/Underinsured Motorist Coverage
Knowing that your injuries, and those of your passengers, will be covered when you purchase uninsured/underinsured motorist coverage is a big relief. However, that’s not the only reason to consider purchasing this coverage.
Other features include:
Coverage is available for you, your family members, passengers in your car and anyone you lend your vehicle to with permission.
When you have uninsured/underinsured motorist coverage that kicks in to pay covered losses, the accident will be reflected on your driving record as a “not at fault” incident.
This is true even if you were actually at fault. The bodily injury portion of this coverage is designed to cover your medical bills, lost wages, pain and suffering. Your policy may also provide benefits if you or a passenger is disfigured or disabled as a result of the accident. The property damage portion of uninsured/underinsured motorist coverage will pay for necessary repairs to your vehicle, the expense of renting a car if necessary, and even for your personal property that was damaged in the accident.
In Texas, uninsured/underinsured motorist coverage comes with an automatic deductible of just $250, half of the usual $500 deductible most people have for their auto policies.
Example: Uninsured/Underinsured Motorist Coverage in Action
Let’s look at an example of how valuable this type of coverage can be:
John purchased an auto insurance policy for his brand-new SUV, but declined uninsured/underinsured motorist coverage, thinking he would never need it.
On his way home from dinner with his family a few weeks later, another car veered into his lane and John was unable to avoid a head-on collision. Not only was his brand new vehicle totaled; he and his family needed extensive medical care.
While the at-fault driver had insurance from another state, she unfortunately only carried the bare minimum amount of coverage that state required: $25,000 per person for medical expenses, up to a maximum of $65,000 per accident, and $15,000 for property damage.
The bodily injuries to John and his family, and the property damage to his vehicle exceeded both limits. Unfortunately, the other driver was also injured and had no assets that John could recover, so he was forced to make up the difference out-of-pocket.
If John had purchased the recommended amount of uninsured/underinsured motorist insurance, he would have only been responsible for paying his $250 policy deductible.
Protect Yourself against Loss: Purchase Uninsured/Underinsured Motorist Coverage
Here’s the bottom line: We never know if or when we’ll be in an accident, or whether the other driver will have adequate insurance coverage.
The benefit you can get from purchasing uninsured/underinsured motorist coverage is worth paying a few extra dollars per month. Protect yourself by adding this valuable coverage today. To learn more, contact your Vos insurance professional.