Is Uninsured Motorist Coverage Necessary?

If you've been looking at getting car insurance, you may come across something that is called "uninsured" or "under-insured" motorist coverage. You may think that is type of coverage is unnecessary because everyone is required to have insurance or proof of financial liability in all states. However, a 2014 study by the Insurance Information Institute estimates that about 12.6%, or 1 in 8 drivers, were driving without insurance in 2012. In some states, it can be as high as 1 in 4 drivers without insurance.

What is uninsured motorist coverage?

When you have uninsured motorist coverage, you are covered if someone without insurance causes an accident or injury to you or your passengers. Depending on the policy, you may also be covered for hit-and-run accidents. Generally, uninsured motorist coverage is sold in two different parts: bodily injury and property damage. You can usually opt out of the property damage part, but it is not recommended. Both types of coverage may not be available in all states. Payouts for uninsured motorist coverage may be limited.

Who needs to buy uninsured motorist coverage?

Uninsured motorist coverage is a good idea for most people no matter where they live. In some areas, it may be required by law. It is almost a necessity if you live or travel to areas where people are less likely to have insurance. An example of an area where you might find a high number of uninsured motorists is near an international border. You may also want to consider it if you think you live in an area known for having a higher-than-average number of unlicensed or uninsured drivers or has a lot of hit-and-run accidents.

What about under-insured motorist coverage?

Under-insured motorist coverage works similar to uninsured motorist coverage. It covers the costs for bodily injury or property damage that are over the other driver's insurance limits if they are at fault. Many people get only the minimum amount of insurance required by the law and it may not cover all your costs. Under-insured motorist coverage fills in some of the gaps. It may not be offered in all states.

Uninsured and under-insured motorist coverage gives you extra protection should you be unlucky enough to have accident caused by an uninsured or under-insured driver. Even if you live in a no-fault insurance state, having this type of insurance may provide extra coverage above what your insurance company is required to pay by law. To find out what your options in regards to this type of coverage are, contact a local insurance agent like Sunset Insurance Agency for more details.