What Is Uninsured Motorist Coverage (UM)?

Insurance Claim

Uninsured motorist coverage (UM) is a type of insurance that protects you in the event of an accident where the at-fault driver does not have sufficient insurance to cover your damages. This coverage is particularly important in situations where you might otherwise be left to shoulder the financial burden of medical bills, property damage, and other associated costs.

Additionally, UM coverage can serve as a safety net, ensuring that you receive the necessary compensation, even when the responsible party is unable or unwilling to pay. Understanding the importance and benefits of uninsured motorist coverage can help you make informed decisions about your auto insurance policy.

Wrecked white sedan - What Is Uninsured Motorist Coverage (UM)?

How Uninsured Motorist Coverage Works

When you are involved in an accident with a driver who lacks adequate insurance, uninsured motorist coverage steps in to cover your expenses. This type of coverage typically includes two main components: Uninsured Motorist Bodily Injury (UMBI) and Uninsured Motorist Property Damage (UMPD). UMBI covers medical expenses, lost wages, and other injury-related costs resulting from the accident, while UMPD covers the repair or replacement of your vehicle and property.

The claims process usually begins with you reporting the accident to your insurance provider. After an assessment of the damages and verification that the at-fault driver is uninsured or underinsured, your insurer will process your claim under your UM coverage. Depending on the policy specifics, there may be coverage limits and deductibles to consider. By understanding these elements, you can better navigate the aftermath of an auto accident and ensure that you have the necessary support to recover both physically and financially.

What Does Uninsured Motorist Coverage Cover?

Uninsured motorist coverage provides financial protection in numerous situations where the at-fault driver fails to have adequate insurance. This essential coverage encompasses several key areas, ensuring that you are not left vulnerable after an accident.

Here are some examples of what uninsured motorist coverage can cover:

  • Medical Expenses: Covers the cost of medical treatments, hospital stays, and rehabilitation if you or your passengers are injured in an accident.
  • Lost Wages: Compensates for income lost due to time off work resulting from accident-related injuries.
  • Pain and Suffering: Provides compensation for physical pain and emotional distress caused by the accident.
  • Property Damage: Ensures repairs or replacement costs for your vehicle and other damaged property.
  • Funeral Costs: Covers expenses associated with funeral services in the unfortunate event of a fatal accident.

How Many Drivers Don’t Have Car Insurance in the USA?

According to the latest data from the Insurance Research Council (IRC), over 1 in 7 drivers in the United States are uninsured. This equates to nearly 14% of motorists nationwide who are driving without insurance coverage as of 2022. The prevalence of uninsured drivers can vary significantly by state, affecting overall risk levels and impacting insurance premiums.

Top 10 States with the Most Uninsured Drivers

The following are the states with the highest percentage of uninsured drivers:

  1. District of Columbia: 25.2%
  2. New Mexico: 24.9%
  3. Mississippi: 22.2%
  4. Tennessee: 20.9%
  5. Michigan: 19.6%
  6. Kentucky: 18.7%
  7. Georgia: 18.1%
  8. Delaware: 18.1%
  9. Colorado: 17.5%
  10. Ohio: 17.1%

Top 10 States with the Least Uninsured Drivers

Conversely, the states with the lowest percentage of uninsured drivers, indicating the highest rates of insured motorists, are:

  1. Wyoming: 5.9%
  2. Maine: 6.2%
  3. Idaho: 6.2%
  4. Utah: 7.3%
  5. New Hampshire: 7.8%
  6. Nebraska: 7.8%
  7. North Dakota: 7.9%
  8. Kansas: 8.0%
  9. South Dakota: 8.0%
  10. Minnesota: 8.7%

uninsured motorist

How Common Is Uninsured Motorist Coverage?

Uninsured motorist coverage is a critical component of many auto insurance policies, yet its prevalence varies among drivers. According to a study by Autoinsurance.com, approximately 82% of insured drivers in the United States have uninsured motorist coverage as part of their auto insurance policies. This statistic underscores the recognition of the significant risk posed by uninsured and underinsured motorists on the roads.

The adoption rate of UM coverage can be attributed to several factors, such as state insurance requirements, personal experiences, and increased awareness of the risks posed by uninsured drivers. In some states, UM coverage is mandated by law, ensuring higher uptake among policyholders. Conversely, in states where UM coverage is optional, education and awareness initiatives have played a key role in encouraging drivers to include this protection in their policies.

Understanding the commonality of uninsured motorist coverage highlights its role in safeguarding drivers against the financial ramifications of accidents involving uninsured or underinsured motorists. As more drivers opt for this essential coverage, the financial security and peace of mind provided by such policies continue to enhance road safety nationwide.

How Much Does Uninsured Motorist Coverage Cost?

The cost of uninsured motorist coverage varies depending on several factors including the driver’s location, driving history, and the amount of coverage selected. On average, adding uninsured motorist coverage to an auto insurance policy costed an average of $78 annually, according to an IRC study in 2021 . However, these costs can be higher or lower based on individual circumstances and specific policy details.

Location plays a significant role in determining the cost, as states with a higher percentage of uninsured drivers generally see higher premiums for this type of coverage. Additionally, drivers with a history of accidents or claims may face increased costs. Coverage limits also impact the final price, with higher limits providing more protection but at a greater cost.

Most Expensive And Least Expensive States For Auto Insurance

When it comes to auto insurance premiums, there is significant variation across different states. According to data from the Insurance Information Institute, the most expensive and least expensive states for auto insurance in 2021 showcase the disparity influenced by factors such as state regulations, driving environments, and the prevalence of uninsured drivers.

Most Expensive States for Auto Insurance

  1. New York: $1,511.04
  2. Louisiana: $1,500.38
  3. District of Columbia: $1,434.53
  4. Florida: $1,431.56
  5. Rhode Island: $1,422.42
  6. New Jersey: $1,365.71
  7. Michigan: $1,306.32
  8. Georgia: $1,268.34
  9. Nevada: $1,264.70
  10. Delaware: $1,258.20

Least Expensive States for Auto Insurance

  1. North Dakota: $691.50
  2. Maine: $712.97
  3. Iowa: $725.30
  4. Idaho: $741.54
  5. Wisconsin: $757.50
  6. South Dakota: $767.49
  7. Indiana: $767.57
  8. Ohio: $776.24
  9. North Carolina: $780.19
  10. Vermont: $780.45

The variation in auto insurance costs among the states is primarily driven by differences in state laws, traffic density, rates of vehicular theft, and average accident rates. States with higher urban populations, more congested roadways, and greater incidences of uninsured drivers tend to have higher insurance premiums. Conversely, states with more rural areas and lower accident rates generally have more affordable auto insurance premiums.

Claims Adjuster dealing with uninsured motorist claim

Which States Require Uninsured Motorist Coverage?

Uninsured motorist coverage is mandated in 21 states plus the District of Columbia to ensure that drivers are protected against the risks posed by uninsured and underinsured motorists. The requirement for UM coverage helps mitigate the financial burden on insured drivers who may otherwise bear the costs of an accident involving an uninsured driver. Each state has distinct regulations regarding the necessity and limits of UM coverage.

Below is a list of states that require uninsured motorist coverage:

  1. Connecticut
  2. District of Columbia
  3. Illinois
  4. Kansas
  5. Maine
  6. Maryland
  7. Massachusetts
  8. Minnesota
  9. Missouri
  10. Nebraska
  11. New Hampshire
  12. New Jersey
  13. New York
  14. North Carolina
  15. North Dakota
  16. Oregon
  17. South Carolina
  18. South Dakota
  19. Vermont
  20. Virginia
  21. West Virginia
  22. Wisconsin

Uninsured Motorist vs. Underinsured Motorist Insurance

Uninsured motorist (UM) and Underinsured motorist (UIM) insurance coverages are both designed to provide financial protection in accidents involving drivers who do not have sufficient insurance coverage. While they may seem similar, there are key distinctions between the two types of coverage that are important to understand.

Uninsured Motorist Insurance (UM)

Uninsured motorist insurance provides coverage in the event that you are involved in an accident with a driver who does not have any auto insurance at all. This type of insurance covers medical expenses, lost wages, and other damages that you would typically recover from the at-fault party’s insurance. UM coverage ensures that you are not left to bear the financial burden of an accident caused by an uninsured driver.

Underinsured Motorist Insurance (UIM)

Underinsured motorist insurance, on the other hand, applies when the at-fault driver has liability insurance, but their policy limits are not sufficient to cover the full extent of your losses. The minimum auto insurance policy limits vary from state-to-state, and many are quite low. In such cases, your UIM coverage will kick in to make up the difference between the at-fault driver’s insurance coverage and the actual damages you have incurred. This ensures that you receive adequate compensation without having to pay out-of-pocket for someone else’s insufficient coverage.

Key Differences Between UM and UIM

  • Coverage Scope: UM insurance is used when the at-fault driver has no insurance at all, whereas UIM insurance supplements the at-fault driver’s insufficient coverage.
  • Activation Trigger: UM activates when the other driver is completely uninsured, while UIM is triggered when the other driver’s insurance limits are exhausted and do not cover the full damages.
  • Protection Level: Both UM and UIM provide protection for medical expenses, pain and suffering, and lost wages, but UIM specifically addresses coverage gaps, ensuring that all expenses are covered comprehensively.

Our Injury Attorneys at Recommend Buying Uninsured Motorist Coverage

At Thompson Law, we strongly advocate for the purchase of Uninsured Motorist (UM) coverage as a crucial component of your auto insurance policy. Our extensive experience in representing clients involved in motor vehicle accidents has consistently demonstrated the importance of having adequate UM coverage. This type of insurance provides indispensable financial protection if you encounter an accident with a driver who lacks sufficient insurance.

By investing in UM coverage, you safeguard yourself against the potential financial devastation caused by medical expenses, lost wages, and other damages, which can arise from an uninsured driver’s negligence. We have seen firsthand how UM coverage can make a significant difference in our clients’ recovery process, both physically and financially. Therefore, we recommend discussing your insurance options with your provider to ensure you have the necessary coverage to protect yourself and your loved ones.

If you were involved in an auto accident with an uninsured motorist and have UM coverage, contact Thompson Law today for a FREE CONSULTATION.

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