The issue of uninsured motorist car insurance coverage is a complicated and elusive issue. To help make it clearer, think about this photo on the left. The man holding the umbrella is you. You are the responsible citizen who carries more than the minimum amount of car insurance required by law, including uninsured motorist. The lightening striking the umbrella is the uninsured motorist. The umbrella, well, the umbrella is everything and everyone who is desperately trying to prevent you being hurt physically or financially by the lightening. If you can feel your eyes widening in understanding then you may have it. In reality, an umbrella is in no way effective protection from lightening. So, let’s go through the basics, and then look at some ideas that may work better than an umbrella.
Types Of Uninsured Motorist Coverage
In the United States about one out of every eight drivers does not have auto insurance, even though in most states it is the law. Most states, however, do not have uninsured motorist as a state law requirement. So even though a driver has the minimum required, it is not enough to cover them if they are hit by an uninsured motorist. Uninsured motorist coverage is an option you can request from your car insurance company, but there are three different types, each with a different price tag, depending on the insurance company.
- Uninsured Motorist Insurance, aka Uninsured Motorist Bodily Injury insurance is the most complete. It covers the cost of you and your passengers’ medical bills if you are in an accident with an uninsured motorist who is at fault. It will also reimburse you and your passenger for lost wages, and covers you if you are hit as a pedestrian or the victim of a hit and run.
- The second type is Uninsured Motorist Property Damage Coverage. This one covers damage to your car or property, and may or may not be available to you, depending on your insurer and which state you live in. Also, it usually does not cover hit-and-run accidents.
- Under-insured Motorist Protection is the third type. If you are in an accident and the at-fault driver has liability insurance, but the policy limits do not cover all the damage to your vehicle, then this coverage will make up the difference.
Why Uninsured Motorist Car Insurance Fails Consumers
- According to the National Association of Insurance Commissioners (NAIC) the laws that exist to compel drivers to purchase auto insurance are largely ignored, and many people choose to drive without it. The costs are then passed along to the law abiding public in the form of uninsured motorists’ coverage. So, in addition to paying for their own actions, each insured motorist also pays for a part of the costs for others that choose to disobey the law.
- Another issue is the minimum liability requirements that are now in place were adopted in 1974, when gas was 50 cents a gallon. These minimums have not moved along with inflation, so chances are, even if you were in an accident with someone who had the legal amount of insurance, and you had the legal amount of insurance, there is possibility that even both combined would not cover the damages and medical costs. You do have some control over this though, by talking with your car insurance company and discussing the maximum amount of coverage you can afford, you can make sure you are covered, no matter what happens.
- Lastly, the way that current liability laws are written can easily lead to unnecessary litigation between insured and insurers, which can get expensive very quickly. You’ve heard of ambulance chasers, well this is a similar situation. When there is one or more policy that can provide coverage for the loss or damages, it becomes up to the courts to decide. So, where does that leave you?
The bottom line is, you can’t do much to change the laws or policy rules, but you can know your insurance parameters. Check to see if your collision insurance will cover anything that is not covered by an at-fault driver you may be in an accident with. Maybe you can’t afford a million dollar policy, but try to get one that comes the closest to covering all of your assets. Make sure you stay in touch with your auto insurance company and are familiar with all the limits and deductibles of your personal coverage policy. Knowledge is your umbrella. Remember: you can get cheap car insurance, but it’s better to have great coverage from Cheap Insurance!