What happens when the reckless driver who hit your vehicle doesn’t have liability coverage? Or worse still, what if the driver leaves before you can get their contact information?
Know that uninsured and underinsured insurance coverage protects you financially from irresponsible and reckless drivers. Understanding UI and UIM insurance will help you make informed choices.
What Is Uninsured Insurance Coverage?
It is a type of auto liability coverage that could help pay for any costs if you’re involved in a car accident caused by an individual who doesn’t have auto insurance. This insurance coverage is optional but required in some states.
In the U.S., you can be arrested if you are found driving without valid proof of financial responsibility for liability or damages in the event of a car accident. But that doesn’t mean everyone on the road has insurance.
So, what happens if you’re involved in a car accident and the at-fault driver does not have liability insurance? Uninsured insurance coverage can help pay your car repair and medical bills.
Underinsured Insurance Coverage
This type of coverage works the same way uninsured coverage works. Still, it mainly applies to scenarios where the driver at fault has insufficient insurance coverage. The explanation for this coverage varies from state to state.
Generally, an underinsured driver is anyone who has auto liability insurance, but the coverage is lacking in two ways, as listed below.
- Their limits are equal to or less than your underinsured insurance coverage limit.
- Their limits are insufficient to cover your bills after the car accident.
Underinsured insurance coverage will be the difference between the cost of your injuries and damages and the underinsured driver’s liability limits, up to your own underinsured motorist policy limit.
Some states combine underinsured and uninsured insurance policies as a single type of coverage on a vehicle insurance policy.
What States Require Uninsured Insurance Coverage?
Twenty states require uninsured and underinsured insurance coverage. In other states, they can offer it as an optional insurance coverage you can add to your initial auto insurance policy.
States that require both uninsured and underinsured insurance coverage include:
- Connecticut
- Illinois
- Kansas
- Kentucky
- Maryland
- Minnesota
- Maine
- Nebraska
- New York
- New Jersey
- North Carolina
- North Dakota
- Oregon
- South Dakota
- West Virginia
- Virginia
- Vermont
Check with your state transportation agency to determine whether uninsured insurance coverage is a must.
Do You Need Uninsured Insurance Coverage If You Have Collision Coverage Already?
If your state requires uninsured insurance coverage for your car, you must get it even if you have collision coverage. If it’s optional where you live and you already have collision coverage, you may not need it.
This is because collision insurance coverage helps cover the cost of your repairs or replacement vehicle, regardless of who is at fault. It may also cover single-vehicle accidents like collisions with stationary objects and rollovers.
However, you should know that collision insurance does not cover bodily harm or injury, so you may want to acquire uninsured bodily insurance coverage.
