Uninsured and Underinsured Car Coverage: What is it And Why Do You Need It?

When purchasing insurance you may be asked how much UM/UIM, or uninsured motorist/under-insured motorist coverage you might want.  It may not seem that important because you don't plan to get into a car accident, but the reality is this is an important question in determining what happens when the the unexpected happens. 

Do I Really Need To Have Uninsured Or Underinsured Car Insurance?

In short, uninsured and under-insured coverage allows your own auto coverage to provide benefits to you if the at-fault driver's policy is either revoked or insufficient to Uninsured Motoristcover injuries you suffer in a collision. It is important to remember that the State of Illinois does require coverage for drivers, but there are many drivers who ignore that requirement and drive without insurance.  There are many more drivers who do buy insurance, but purchase the minimum, $25,000.00.   

What Exactly Is Uninsured Care Insurance Coverage?

UM/UIM is insurance you purchase through your policy that covers you if the person who causes a car crash fails to have coverage, or fails to have enough coverage to cover your injuries. 

How Much Underinsured Care Insurance Do I Need?

The next question is how much coverage should you purchase.  That answer mostly depends on how much risk you are willing to accept, and how bad potential injuries are.

Let's take an example to see how UM/UIM coverage could affect a potential recovery.  If you are involved in a significant collision, and fracture your ankle such that you need surgery, you are likely to have significant medical bills.  These medical bills would likely enable you to a settlement of at least $100,000.00.  If the at-fault driver who struck you carries just $25,000.00 of liability coverage, the state minimum, then the most amount of money you can recover from his insurance is $25,000.00.  If the at-fault driver has other significant resources, you may be able to collect from him personally, but most individuals do not have access to $75,000.00 in liquid assets, and he may be able to avoid this debt in bankruptcy.  So the most likely outcome is that if a driver has $25,000.00 in coverage, that is the total amount you will recover from them.  if you have UIM coverage in the amount of $50,000.00 in your own policy,you will be able  submit a claim in the amount of $25,000.00 to your own insurance, and they would provide that coverage to you and seek reimbursement from the at-fault insurance if they so choose.   

If however, you had $100,000.00, you could submit a claim for an additional $75,000.00 from your own insurance and because your injuries were significant, they would tender that additional coverage to you even though the at-fault driver had minimal insurance themselves.  This means by purchasing the $100,000.00 UM/UIM coverage, you will be able to recover an additional $75,000.00 for your injuries.

UM/UIM insurance helps provide for you if your injuries are sufficient enough to warrant more compensation than the at-fault driver's insurance will provide.  There is no magic amount of insurance to have, it will depend on the circumstances of your need.  However, if you get injured and have significant medical bills or, worse, significant long-term injuries, you will be thankful that you purchased the additional UM/UIM insurance to provide coverage when the other driver provides nothing, or the bare minimum. 

Have you been involved in a car accident with an uninsured motorist? If so you need to speak with an experienced car wreck attorney as soon as possible. Contact us online or call us directly at 855.522.5291 to schedule your free, no obligation consultation.