Protecting Yourself Against Uninsured Drivers

You’re on your way to dinner when another car slams into yours. The driver has no insurance. In a panic, you call your insurance agent, unsure of whether your policy will protect you. Their response: “You’re covered.” Relief washes over you, but the fear at that moment was very real.

With the right coverage, that fear is entirely avoidable.

According to the Insurance Research Council, about one in seven drivers is uninsured, but when you include underinsured drivers, that number may climb as high as one in three. If one of them hits you, the financial fallout can be severe. Vehicle damage alone can average around $6,300. In cases involving serious or fatal injuries, the cost can reach nearly $2 million, according to the National Safety Council, which factors in medical bills, lost earnings and potential lawsuit payouts in the aftermath of a serious crash.

That’s why it’s important to carry uninsured/underinsured motorist (UM/UIM) and uninsured/underinsured property damage (UMPD/UIMPD) coverage.

Do you need coverage for uninsured or underinsured drivers?

Some states require this type of insurance, but even if yours doesn’t, it’s highly recommended. Without UM/UIM (PD) coverage, you could be left paying out of pocket for medical and damage expenses, even if the accident wasn’t your fault.

UM/UIM insurance can also help pay for things like:

• Medical bills for your passengers who don’t have insurance
• Lost wages if your injuries keep you from being able to work
• Coverage gaps, especially if you have Medicare or Medicaid, which might not pay until other forms of insurance are exhausted.

How much UM/UIM coverage do you need?

As a general rule, you want enough coverage to protect yourself if the other driver can’t afford to pay for the loss.

Experts recommend matching your uninsured/underinsured motorist (UM/UIM) coverage to your regular auto liability limits. While liability coverage pays for damage you cause to others, UM/UIM coverage pays to cover you if you’re hit by a driver who has little or no insurance.

Many policies default to state minimums like $25,000/$50,000/$25,000, which means

• Up to $25,000 for injuries to one person (including you)
• Up to $50,000 total if more than one person is hurt
• Up to $25,000 for property damage, like repairs to your car.

However, these amounts can fall short fast after a serious crash. Medical bills, lost wages and vehicle repairs can easily exceed those minimums, especially if more than one person is involved.

That’s why higher limits, such as $100,000/$300,000/$100,000 or more are typically recommended.

What are the types of UM/UIM?

Insurance rules vary by state. However, in most states, UM and UIM (and PD) coverage are standalone coverages, and each must be purchased individually. In a few jurisdictions, a Combined Single Limit option is available, which means there’s one pool of coverage to help pay for either injuries or property damage—whichever is higher—up to that limit.

Here’s how the coverage typically breaks down:

• Uninsured Motorist Bodily Injury (UMBI): Pays your medical expenses if the at-fault driver has no insurance
• Uninsured Motorist Property Damage (UMPD): Covers repairs or replacement of your car if it’s damaged by an uninsured driver
• Underinsured Motorist Bodily Injury (UIMBI): Covers your medical expenses when the other driver’s insurance isn’t enough
• Underinsured Motorist Property Damage (UIMPD): Helps pay for vehicle repairs or replacement if the other driver’s coverage falls short.

How much does it cost?

UM/UIM coverage is one of the more budget-friendly types of insurance you can add to your auto policy.

According to Forbes Advisor, uninsured motorist coverage with limits of $100,000/$300,000 costs about $25 per month on average—much less than you’d pay out of pocket after a serious accident. Your rate may vary based on your coverage limits and whether it includes both bodily injury and property damage.

While cost varies by location and vehicle, this coverage is generally affordable. “People often decline full coverage because they want to save money,” points out Jeff Deal, insurance agent with AAA. “But often they come back and say, ‘I wish I would have listened to you.’”