What happens when you’re hit by a driver with no insurance or not enough insurance? Who ends up paying? Keep reading to find out.
What’s Uninsured and Underinsured Motorist Coverage?
Uninsured and underinsured motorist coverage protects you when another driver causes an accident, and either doesn’t have insurance or has less coverage than what you lost due to the accident. UI/UIM coverage covers your medical expenses, lost wages, and property damage up to your limits. There are usually three limits involved:
- Per-person limit on medical bills and other financial losses.
- Per-accident limit on the total amount the policy will cover.
- Property damage limit for damage to your vehicle and belongings.
Like your liability policy, these limits are usually written as ($XX,XXX/$YY,YYY/$ZZ,ZZZ) in the above order. UI/UIM coverage is an optional add-on to your insurance policy. If you choose to purchase it, you can typically either match your liability limits or select a lower amount. It generally isn’t possible to obtain more coverage without increasing your liability limits.
Shouldn’t the Other Driver Have to Pay?
If the other driver is legally at-fault for the accident, they are liable for reimbursing you for any of your expenses even if those expenses are above their insurance limits or they don’t have insurance. However, whether you can actually collect is a different question. Receiving compensation beyond what insurance coverage generally means filing a lawsuit. It could take months or years before you receive any money, and you’ll typically need to pay your lawyer about one-third of what you recover. This means you’ll need to find a way to cover your medical bills and other expenses out of your own pocket, and you may not be reimbursed in full after subtracting legal costs.
Further, even if you win a lawsuit, the other driver may not have any money. Many drivers who drive without insurance or with low limits aren’t in a good financial position. If you win a court judgment against them, they may not have income, savings, or assets for you to collect from.
Wouldn’t Your Health Insurance Cover Injuries?
Your health insurance coverage may cover injuries from an auto accident. However, you would need to pay your deductible either once or each year if you need long-term care. Your health insurance policy may also have coverage limits or exclusions that could mean it wouldn’t pay for all of the care and rehabilitation you need. Finally, health insurance doesn’t cover things like lost wages or compensation for long-term disabilities. UI/UIM coverage fills in these gaps.
How Much Uninsured or Underinsured Motorist Coverage Do You Need?
The amount of coverage you need varies based on your financial situation and what other types of insurance that you have. Generally, you want to be insured against not being able to work, medical expenses, and disabilities. In some cases, separate health insurance or disability insurance may provide all or most of the coverage you need. In other situations, you may want to select the maximum UI/UIM coverage available to you.
First National Insurance can help you figure out what coverage you need. Our agents handle all types of insurance including auto insurance policies with uninsured and underinsured motorist coverage and can create a bundle of different types of insurance to match your specific situation. To learn more or request a quote, contact us now.