Two drivers get into an accident and one is at fault. The problem is that the one who is at fault may not have insurance. If that is the case than that operator now becomes an uninsured motorist. What if that operator is YOU? So how can you get compensated for your loss? That is where Uninsured Motorist/Underinsured Coverage (a/k/a UM/UIM) from your automobile policy becomes very important. Uninsured Motorist can provide you with coverage for any bodily injuries you suffer in this accident.
Now let’s say that the other driver has some insurance; however, they only carry minimum liability limits. In this case, your UM/UIM coverage can provide the difference between your actual injury expenses and the other driver’s coverage up to the limits provided under YOUR own policy. Of course, this is only if you are carrying higher UM/UIM limits that the other driver. Keep in mind that the minimum UM/IUM liability limits vary from state to state and in NYS those limits are only $25,000 per person and $50,000 per occurrence no matter how many people are injured in an accident.
What is most important to understand about UM/IUM coverages is that it only applies when you are involved in an accident and, the person causing the accident, doesn’t have any insurance or doesn’t have enough insurance to cover your bodily injuries. The coverage also applies when you are the victim of a hit and run accident, a pedestrian knock down or a bicycle knock down accident. In such cases, you can file an “uninsured motorist” claim with your own auto insurance carrier, under your own coverage.
Do you know what your limits are? Have you reviewed these limits with your insurance agent?
You may believe that such occurrences are not common; however, insurance information sources indicate that up to one (1) out of every seven (7) drivers is uninsured and of those who are insured, many carry only minimum limits. In some states these limits might be as low as $10,000 for each person injured, and $20,000 regardless of how many are injured in one accident. This is not all that surprising given our current economic climate where many people are trying to reduce costs whenever and wherever possible. Even radio and television advertisements seem to be more interested in the cost of insurance rather than in the actual product(s) or coverages being provided. As the economy struggles toward recovery, we urge you not to sacrifice necessary and important coverage for reduced premiums. It could mean your hard earn assets could be wiped out if your limits are not enough to cover your injuries and the necessary expenses related to your recovery.
If you have any doubts about what coverages you should have in place, do not hesitate to contact your insurance agent today.
Are you aware that your Umbrella Policy may or may not offer some additional UM/IUM protection for you and your family? This is what your insurance agent is there for—-to educate and consult with you, as the consumer, so that you can make good choices on what assets and property you want to protect.
By Karen Skoler, CPCU
While it is true that we do try to impart some humor in our blogs, while educating our readers about insurance, this topic is NO laughing matter.
Recently, a young couple we know had their first children, a set of twins, and they were extremely thrilled at the prospect of raising their new family. On the way to a family gathering they suffered a flat tire and pulled over to the side of the road. The husband got out of the car and, while checking to see if his trunk had all the equipment needed to fix the flat, he was hit by a vehicle driven by a young graduate student texting while driving. In the midst of studying for finals, he had inadvertently allowed his insurance coverage to lapse. The husband suffered very serious injuries which left him unable to work and care for his family for the next three years. Clearly, the accident was the fault of the graduate student! BUT coverage under no fault was limited and our young family was left without any help against the young man with limited resources who had caused this tragic accident.
Uninsured/Underinsured Motorist coverage is simply “insurance that pays for injuries suffered in an accident where the owner or driver who causes the accident doesn’t have enough liability or is uninsured at the time of the loss”. With the presence of additional limits such as an Umbrella policy, excess uninsured/underinsured motorist coverage kicks in after the coverage on the underlying auto policy is used up. I always tell my customers, “you can be sure of the coverage provided by your own policy because you bought it, but you can’t be sure of the coverage held by the other drivers on the road”. The importance of this coverage can’t be and shouldn’t be minimized. In addition, if you are hit by a vehicle that doesn’t stop, whether you are in your car, walking across the street, or riding your bicycle uninsured/underinsured coverage also comes into play.
As insurance agents, it is our job to make our customers aware of the coverages they need and the reasons why they should include such coverage in their purchase. Today, more and more, it seems like the emphasis is on the cost of insurance rather than on the protection which it affords. While some people understand the need for higher than state mandated liability limits to protect us if we are responsible for the injuries of others, we don’t really understand this coverage which can protect us and our loved ones if someone else has the lowest limits or no limits at all. After all, isn’t the purpose of insurance to protect us and our families from unforeseen disasters such as the scenario depicted above?
There is no doubt that everyone today is looking for a bargain and nobody wants to incur any additional expense, especially for something they don’t really understand. A good agent or broker will take the time to answer your questions to your satisfaction and make you knowledgeable about what coverages should be included in your insurance portfolio. Uninsured/Underinsured Motorist is a must when it comes to designing your Auto policy. Take it from us, we see claims everyday and nobody is ever sorry for including this coverage in their purchase of insurance when the need for it arises. If you want to feel safe every time you get in your car, you might want to rethink purchasing this coverage and buying adequate limits with this article in mind.
– Karen Skoler, CPCU