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What Is Uninsured Motorist Insurance?

An estimated 12.6 drivers in the United States are currently uninsured. What impact does this have to a licensed, law abiding driver? It means costs might not be covered when someone with no insurance hits your car, leaving you to pay out-of-pocket for damage and/or medical bills. Drivers with minimum insurance may not have enough liability coverage to pay your expenses.

Plus, chances are that these people with inadequate or no insurance do not have the money to pay for the damages on their own, which is where uninsured motorist property damage insurance comes into play.

Today, many insurance companies offer uninsured motorist property damage in their coverage to protect insured drivers from uninsured drivers. Uninsured motorist property damage insurance coverage can help pay for damage — up to your coverage limits — when accidents with uninsured motorists occur.

To help you better understand the situation, autoinsurancecenter.com has compiled a list of important questions, topics and items to know when it comes to uninsured motorist property damage insurance and how you can be best protected against uninsured motorists when they are the at-fault party.

What is an uninsured motorist?

An uninsured motorist is defined as “one who has no insurance, does not have insurance that meets state-required minimum liability amounts, or whose insurance company is unwilling or unable to pay the claim.”

Furthermore, a hit-and-run driver would be considered an uninsured motorist, as the cost of fixing the damage is left up to you.

What is uninsured/underinsured motorist property damage insurance?

First, uninsured motorist property damage coverage comes into play when the other driver involved is determined to be at-fault (or at least partially at-fault) for the accident. This at-fault driver must have either no insurance or inadequate insurance coverage. An underinsured motorist is a driver whose liability limits are too low to cover vehicle and medical costs in an accident where they are at-fault.

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The function of uninsured motorist property damage insurance is to pay for the vehicle damage when the at-fault party does not have auto liability insurance. Most uninsured motorist property damage insurance will pay only up to the value of your vehicle, but it depends on your coverage and what state you currently reside.

If under your insurance policy, you do not have collision coverage, uninsured motorist property damage will pay up to a certain amount for car repairs. Depending on your state of residence, the limit might be up to $3,500. Some states will have the limit that matches the actual cash value of the vehicle. Again, check to see what your limit is within your current state. This goes the same for deductibles, as some states have uninsured motorist property damage insurance with a deductible, normally ranging from $200 to $500.

What does uninsured motorist insurance cover?

While uninsured motorist property damage insurance covers car damage, uninsured motorist insurance primarily covers two areas, bodily injury and property damage. Many states require uninsured motorist bodily injury insurance, while uninsured motorist property damage coverage is not required in every state.

With bodily injury, the insurance may help with injury costs caused by the accident. Moreover, in some states, this coverage may include family members and passengers also in the car. The property damage definition includes covering the cost to repair the car after an accident. In certain cases, property damage may include valuable items damaged from the accident, such as computers, cell phones or other devices as well as property, such as fences or a mailbox. Again, this varies from situation to situation and the state you currently reside in.

An important point with bodily coverage — your uninsured motorist insurance coverage limits must be higher than the limits of the uninsured driver’s bodily injury liability coverage in order to use it. Otherwise, you may not receive benefits. With property damage, uninsured motorist property damage coverage can be used when the at-fault driver has inadequate insurance.

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Split limit is another important term with bodily injury coverage, where your insurance will differ depending how many people are injured (one vs. multiple people). For example, if you chose the option of a split limit of $15,000/$30,000, it would look like this:

  • $15,000 for bodily injury, per individual
  • $30,000 for total bodily injury, per accident

Some insurance companies may make it possible to offer one amount that the insurance company will pay when it comes to bodily injury coverage.

Additionally, uninsured motorist property damage coverage will only cover the costs up to the value of your car, although in some states it may be less. So the older your car is, the less you’ll get from uninsured motorist property damage policy.

On the insurance side, generally speaking, most insurance carriers will not let policyholders carry more uninsured/underinsured motorist coverage than they carry for their own liability. If policyholders only bought the minimum insurance and then stocked up on uninsured motorist coverage, it would be a huge financial burden for insurance companies.

Does uninsured motorist cover a hit-and-run?

Normally, hit-and-run accidents are covered under uninsured motorist property damage coverage, although it varies by state. Additionally, if you have uninsured motorist bodily injury coverage, you and your passengers will be covered if a hit-and-run accident occurs.

What steps should be taken after an accident when the at-fault driver is uninsured?

At the time of the accident, it’s important that you gather the at-fault party’s information. If the police are involved and investigate the accident, they will ask all parties involved about their insurance coverage details. When a party says that they are an uninsured motorist, be sure to immediately make an uninsured motorist claim with your auto insurance provider. The time to make such claims are limited, as in some cases, the insurance holder is only given 30 days or less to file this type of claim.

Also, be aware that when you file a claim, your insurance company will most likely investigate the damage and injuries to handle the claims in good faith. Sometimes, the investigation can turn your uninsured motorist claim into a bad faith claim against your insurance company.

What is the difference between uninsured/underinsured motorist property damage coverage and collision coverage?

Compared to the above definition of uninsured motorist property damage insurance, collision coverage usually has a higher deductible than uninsured motorist property damage insurance. In short, uninsured motorist property damage insurance is much less expensive than collision coverage, but uninsured motorist property damage insurance alone is not enough to cover all potential repair and replacement costs due to accidents.

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With your current insurance policy, you may already be paying for collision coverage, which covers the cost of repairs or replacement after an accident you or another party is at-fault for as well as driving into a tree, building, telephone pole or other object. Collision coverage also covers damage from a car flip or roll over where no other car or object was involved and pays for the damage caused by an uninsured driver.

Furthermore, with collision coverage, payment is limited to your car’s actual value, minus the deductible. Although no state requires collision coverage, most often insurance companies will require customers to buy both collision and comprehensive insurance coverage.

Additionally, with uninsured motorist property damage vs. collision, though collision coverage may protect you by paying for the damage, part of uninsured motorist coverage would include a bodily injury section and could help pay for medical bills.

Does collision insurance cover uninsured motorist?

Yes, collision coverage does protect drivers against uninsured drivers and pays for the damage caused by a driver who was either uninsured or inadequately covered.

How does uninsured motorist property damage insurance vary by state?

Another important factor to consider is where you live and if uninsured motorist property damage insurance is required or not. States set laws surrounding the minimum amounts of auto insurance that drivers must have. In some states, uninsured motorist coverage is required by law. Below are how the states differ when it comes to uninsured motorist insurance coverage:

  • States where you must have uninsured motorist property damage insurance: Connecticut, Washington D.C., Illinois, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia and Wisconsin.
  • States with “No Pay, No Play” law: Alaska, California, Iowa, Kansas, Louisiana, Michigan, New Jersey, North Dakota, Oklahoma and Oregon. This law limits the uninsured driver’s ability to claim damages if they are in an accident with an insured motorist.
  • New Hampshire: Drivers are not required to buy car insurance or uninsured motorist coverage.
  • Rest of the states: No requirement when it comes to uninsured motorist insurance. It’s up to insurance companies whether to offer the insurance with their policies, although many do not.

In some states, such as California, insurance companies must offer uninsured/underinsured motorist coverage, but you have a choice of whether or not to buy it. If you opt out, you must sign a waiver that says you were offered the coverage and turned it down.

car crashAdditionally, states have different requirements for how much damage uninsured motorist property damage insurance will cover. In California, the insurance will pay up to $3,500 or the value of the car, whichever is less. In other states, such as Kansas, uninsured motorist property damage insurance covers up to $25,000.

Uninsured motorist property damage insurance may also come with a deductible, depending on where you live and vary between states and circumstances.

To better understand how uninsured motorist property damage insurance works where you live, look up your state’s requirements and that way, you can find coverage that best suits your individual needs.

What's the future of uninsured motorist insurance?

What does the future look like with uninsured motorist insurance and uninsured motorist property damage insurance? Some states have gone digital with online verification systems (OLV). This system, which is currently being used in Texas as well as in nine other states, is helping give law enforcement real-time information about motorist insurance verification and can track uninsured motorists.

This system helps speed up the process during accident reports as well as at traffic stops or even when cars are being registered.

Which states have the highest and lowest percentages of uninsured motorists?

States with the highest percentage of uninsured motorists include: Oklahoma (25.9 percent), Florida (23.8 percent), Mississippi (22.9 percent), New Mexico (21.6 percent) and Michigan (21 percent).

States with the lowest percentage of uninsured motorists include: Massachusetts (3.9 percent), Maine (4.7 percent), New York (5.3 percent), Utah (5.8 percent) and North Dakota (5.9 percent).

As such, the good news for insured drivers is that the percentage of uninsured motorists is trending downwards. In 2003, it was as high as 14.9 percent, according to the Insurance Research Council (IRC) and is now sitting at 12.6 percent.

Do I need uninsured motorist property damage insurance?

Really, it comes down to what’s included in your current auto insurance coverage and where you live. Uninsured motorist property damage insurance is best for drivers who only pay for liability coverage, in that it helps cover the costs of vehicle damage.

If you’re paying for collision coverage, though uninsured motorist property damage insurance would be a lower deductible, it wouldn’t make sense to pay for an additional policy that your collision service covers. Additionally, if you feel your car isn’t worth much, you may not want to invest in either collision or uninsured motorist property damage insurance.