Uninsured and Underinsured Motorist Coverage

What is Uninsured and Underinsured Motorist Coverage?

Uninsured motorist (UM) coverage reimburses victims of a vehicle accident for certain damages when the accident is caused by an uninsured driver. Underinsured motorist (UIM) coverage helps pay for the gap between an at-fault driver’s liability insurance coverage and your damages up to your chosen limit.

Here are some scenarios for an uninsured driver:

  • Their insurance company denies the claim.
  • Their vehicle is not insured for bodily injury (BI) liability coverage.
  • The at-fault driver flees the scene of an accident.

Why is UM/UIM coverage important?

First, medical expenses add up very quickly. A recent study by the Kaiser Family Foundation found that nearly half of all survey respondents said that they would be unable to pay a $500 unexpected medical bill without borrowing money. Also note that nearly 15% of drivers do not have the legally required Liability coverage. That does not include the drivers who only carry minimum limits.

So, if you are in an accident with an uninsured or underinsured driver, without UM/UIM coverage, you could be responsible for large out of pocket medical costs. UM/UIM coverage is recommended.

What else do I need to know about UM/UIM?

UM and UIM coverage is mandatory in some states but not others. Forge Insurance has underwriters on hand who can help you navigate your individual situation.

Like liability coverage, UM/UIM coverages come in two flavors of limits—split limits and combined single limits (CSL). Let’s say that you chose a split limit of $30,000/$60,000. $30,000 would be the most an insurance company would pay for injuries sustained by a single person and $60,000 would be the most paid for all injuries for all other people in an accident. Whereas a combined single limit (CSL) of $60,000 would be the most your insurance company would pay for all injuries in a single accident.

Some states have Uninsured Motorist Property Damage (UMPD) coverage. Let’s say that this limit is set at $15,000. In this scenario, $15,000 is the most an insurance company would pay for property damage for a single accident.


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