Say, for instance, that you and your spouse both work in downtown Phoenix and live in Scottsdale. On your joint commute one morning, you got into a terrible accident with another vehicle. Severe damage was done to your car, and you and your spouse were injured.
Normally, in a situation like this, you would file a claim with the at-fault driver’s insurance. Their plan would pay for all of the property damage to your car and the following for you and your spouse’s bodily injuries:
- Hospital and doctor’s bills
- Other medical bills, like those for medications, physical therapy, and more
- Pain and suffering compensation
- Compensation for time off work
If, however, the other driver had no insurance, you would have none of these things paid for. If they only had minimal insurance, only a fraction of your bills would be paid for.
Depending on your injuries and the damage to your vehicle, it’s likely that you would be accountable for tens of thousands of dollars in bills, and you may even lose your assets and/or your jobs.
What could protect you, on the other hand, is uninsured motorist coverage.
What Does Uninsured Motorist Coverage Do?
Uninsured motorist coverage gives you peace of mind. In real-world scenarios, it keeps you from being caught without coverage if you get into an accident with an uninsured (or underinsured) driver.
It is often abbreviated as UM coverage.
The responsible party in this situation should have the required amount of auto liability insurance. Undoubtedly, you have liability insurance with ample limits. This would pay for the other party’s medical expenses and property damage if you were to cause an accident with them. Unfortunately, many drivers disregard the requirement of liability coverage.
What Are the Different Types of UM Coverage?
Technically, there are three main types of uninsured motorist coverage:
- Uninsured motorist bodily injury (UMBI) coverage
- Underinsured motorist bodily injury (UIMBI) coverage
- Uninsured motorist property damage (UMPD) coverage
1. UMBI Coverage
UMBI coverage pays for your personal injuries if an uninsured driver causes an accident. This covers pain and suffering compensation and lost wages as well.
2. UIMBI Coverage
If the at-fault driver’s liability insurance is insufficient to pay for the extent of your medical expenses, your UIMBI coverage will kick in.
* UMBI and UIMBI coverage are often combined into one policy. You may see this policy called “UM/UIM coverage.” The two can be sold separately as well.
3. UMPD Coverage
UMPD coverage is for car damage caused by an uninsured or underinsured motorist. If the at-fault driver has no insurance (or insufficient coverage), your UMPD coverage can pay for the damages.
This type of coverage generally has a lower deductible than collision insurance. However, UMPD coverage isn’t available in all 50 states. Therefore, if you live in a state (like Arizona) where you UMPD coverage is not offered, you should make sure you have collision insurance.
Collision insurance can cover property damage caused by an uninsured/underinsured driver. It also comes with a deductible.
Is UM Insurance Required in All 50 States?
Uninsured motorist insurance is not required in all states. In Arizona, for example, it is not compulsory. Still, it’s a generally affordable coverage, usually only costing a few extra dollars a month. Having it will protect you and give you peace of mind.
Our friendly and knowledgeable agents at The Don Neeley Agency are here to assist you with your auto insurance needs.
With nearly one in seven uninsured drivers on the road, it’s essential that you protect yourself with UM/UIM insurance. Stop in or give our office a call today to learn more about our coverage options.