Have you ever wondered what would happen if you were in a car accident, and the other driver had terrible insurance or even worse, NO insurance? What if they drive off? That’s when uninsured and underinsured motorist coverage comes into play.
A recent study by the Insurance Research Council estimated that 13% of drivers on the road are uninsured. That’s approximately ONE in every EIGHT drivers!
What’s the difference between Uninsured and Underinsured coverage?
Uninsured coverage protects you if you’re in an accident where the other driver is deemed at-fault and doesn’t have liability insurance.
Underinsured coverage comes into effect if you’re in an accident with an at-fault driver whose liability limits fall short of the total damages and medical expenses. Typically the at-fault driver’s insurance will pay up to their liability limits and anything in excess would be covered up to the limits you select on this coverage.
Most states require a vehicle owner to carry a minimum level of auto liability insurance. In Massachusetts, state law requires vehicle owners to have car insurance in order to receive their license plate and registration. You are required to have the following auto coverages and limits…
- Bodily Injury to Others;
- Personal Injury Protection (PIP);
- Bodily Injury Caused by an Uninsured Auto; and
- Damage to Someone Else’s Property
In the event that an auto accident occurs, a motorist is considered to be “uninsured” when the at-fault operator’s insurance company either 1. denies coverage or 2. becomes insolvent. This happens because an insurer will only pay claims if the injured party is legally entitled to recover damages from the accident as defined by a court ruling.
How do you know if you are protected from uninsured or underinsured motorists?
There are two types of coverages for uninsured/underinsured motorist exposure: Uninsured Motorist Bodily Injury coverage (UMBI) and Uninsured Motorist Property Damage coverage (UMPD).
Uninsured Motorist Bodily Injury coverage (UMBI): Used for liability exposure from uninsured motorists. It can cover any medical expenses, lost wages, pain and suffering or other injury related expenses you and passengers of your vehicle may incur from the accident. UMBI coverage is also the only way for motorists to receive compensation following a claim from a hit and run accident.
Uninsured Motorist Property Damage coverage (UMPD): This coverage is similar to that of UMBI where damage to your property (i.e. your vehicle) is covered in the event of an accident with an uninsured operator. Unlike UMBI, there is no coverage for hit and run accidents under UMPD.
You will find these coverage line items on your personal auto policy declarations page. In Massachusetts, UMBI is required with your auto policy with minimum limits of $20,000 per person and $40,000 per occurrence. In MA, UMPD is not mandated but can be added to your policy for an additional premium.
Are the Massachusetts mandated UMBI limits enough coverage if I am involved in an accident?
Rogers & Gray recommends increasing coverage from $20,000/$40,000 to AT LEAST $50,000/$100,000 to be sufficiently covered for uninsured motorists. If two parties are involved in an accident and the at-fault party carries only the minimum liability insurance, their coverage will most likely fall short of the necessary damages or medical expenses.
This is known as being Underinsured. Underinsured motorist coverage is an optional secondary insurance coverage. This coverage comes into effect when an at fault operator does not have high enough limits of insurance to cover you for damages that result from an accident.
Why should I have Uninsured AND Underinsured Motorist Coverage on my Auto Policy?
These coverages are designed to protect you and your assets. In a world where anyone can sue for almost anything, it is important to protect your family, your home and everything else that may be important to you from being taken through litigation. By adding UMBI and UMPD to your auto insurance policy, it gives you piece of mind to know you’re protected from those who may be morale hazards on the road.
As an independent agent, we pride ourselves on providing the right coverage to our clients not just the right price. When accidents occur, you can count on the Rogers & Gray team to have your back. If you have any questions or concerns, don’t hesitate to consult your insurance contact here at Rogers & Gray or at your own agency.