What Is Uninsured Motorist Coverage & How Does It Work?

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Suppose you are involved in a vehicle accident in which the other driver is legally at fault and causes harm to you. In that case, bodily injury liability insurance will typically help that driver defend himself.

But what if they don’t have liability insurance? Or what if their policy doesn’t cover your expenses?

In cases like this, uninsured motorist (UM) coverage comes in handy.


Everything You Should Know About Uninsured Motorist Coverage

What Is Uninsured Motorist Coverage?


Uninsured motorist (UM) coverage pays for medical bills and other expenses for drivers and their passengers if they are involved in a car accident caused by one of the following:

  • The driver does not have liability auto insurance.
  • The driver lacks sufficient liability insurance to cover their medical expenses.
  • The driver’s insurance company either refuses to provide coverage or goes out of business.


If you are involved in a vehicular accident and the at-fault driver lacks liability insurance, call your car insurance carrier and file a claim under your UM coverage. The following are some examples of UM accidents:

  • You’re a pedestrian crossing a street. An uninsured driver suddenly hits you with little liability insurance. You must file a claim with the driver’s auto insurance company or sue him to obtain compensation from their liability insurance. Then, you would claim with your own insurance company under your UM coverage to cover further expenditures.
  • Your car is parked in a public parking lot. You discover your car has been damaged, but the at-fault driver flees with no information. You would claim your UM coverage in this hit-and-run scenario.


What Does Uninsured Motorist Coverage Cover?

  • Medical expenses. This insurance helps pay for the victim’s damages, such as emergency services, hospital care, medical appointments, or medication.
  • Lost wages. If the injured party requires a lengthy time to recover physically, they may lose income since they cannot do their job obligations. Then, UM coverage may help to fund their compensation.
  • Pain and suffering compensation. This term refers to physical and emotional stress caused by a car accident. The settlement is determined by how the pain or lifestyle changes affect the victim’s quality of life.
  • Funeral expenses. In the worst-case scenario, if the accident causes a fatality and you’re at fault, UM coverage helps pay for the burial fees of the victim. However, insurance companies must investigate who was at fault in the accident.
  • Vehicle damage. Certain motorist coverage pays for car damage caused by a driver who does not have or has insufficient insurance. However, different states have different criteria and regulations to assess whether they should pay for the harm.


How Does Uninsured Motorist Coverage Work?


Before we get into how UM coverage works, it’s essential to understand that there are four main types of motorist coverage. Depending on the policies, each category operates differently and covers different groups.

  • Uninsured motorist bodily injury. This coverage compensates for medical fees, pain, suffering, and lost income if you cannot work after an accident. It also helps pay for burial expenses if the victim is hit by an at-fault driver who does not have car insurance.
  • Uninsured motorist property damage. This coverage comes in useful if someone without insurance hits you. It can assist pay for the repair cost of your car and damage to your home or other property.
  • Underinsured motorist bodily injury. This policy will help if the other motorist does not have enough property damage liability insurance to cover your medical bills, lost wages, and more.
  • Underinsured motorist property damage. Same as underinsured motorist bodily injury, this coverage will assist you if the other driver does not have adequate liability insurance. Still, the payout only covers car or property damage.


Uninsured Motorist Coverage Limits

Uninsured motorist coverage is commonly represented in two amounts, such as $10,000/$30,000. These amounts refer to bodily injury coverage of $10,000 per person and bodily injury coverage of $30,000 per accident.

Meanwhile, underinsured motorist coverage limits are typically written in three sections. For instance, $10,000/$20,000/$10,000. The first section reflects the amount an insurer will pay for each person if an uninsured motorist collides with your vehicle. The second section represents the payout for all injuries resulting from the accident, and the third figure pays for any property damage.


What Is Stacked Uninsured Motorist Coverage?

You have stacked insurance if you make claims on two uninsured motorist policies.

Stacking helps you to obtain more insurance money to meet medical expenditures if you are injured in a car accident. However, some states don’t allow stacking due to their “anti-stacking rule,” which means you can’t file several UM claims for one car accident.

You can choose either one of the following options:

  • Stacking coverage for two vehicles under one policy. For example, suppose you had coverage on the same policy for two cars, each with $10,000. If an uninsured motorist hits one of your cars, you can “stack” coverage and receive up to double the payments.
  • Stacking coverage for two vehicles under two policies but in one name. Assume you have coverage for two vehicles under two different policies, each with $100,000. If an uninsured motorist strikes one of your vehicles, you can stack benefits to get double payouts. Both policies, however, must be under your name.


Stacking sounds appealing because it allows you to get more outstanding payments. However, there are a few things, including pros and cons, to consider when opting for this type of coverage.

  • Pros. With stacking, you can combine the limits of multiple insurance policies on various vehicles, increasing your protection against accident-related expenses. Higher coverage limits may necessitate less out-of-pocket costs for a covered claim.
  • Cons. Stacking insurance costs more. Higher coverage limits will result in higher premiums. This means that if you stack different limitations, you may end up paying more. Thus, you should consider your financial situation before deciding to stack.


Uninsured motorist coverage could be your ideal option if you are looking for collision-related protection in case you have no or little car insurance. Aside from that, because there are several types of motorist coverage, do not invest without careful research. Instead, you should investigate the market, assess your financial situation, and define your needs to determine how much coverage you need and which type is ideal for you.

You can consult with your agent ahead of time to determine which coverage is appropriate for your needs and driving habits.


If you have any questions about Uninsured Motorist Coverage, please get in touch with us to receive a free consultation.


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