What is uninsured/underinsured motorist coverage?

In many parts of the US and Canada, auto policies provide extra protection called uninsured motorist coverage. But it may not be obvious what this coverage does.

Insurance regulations vary based on state or province. So, uninsured motorist coverage may not be required everywhere. However, if it’s available, its benefits can make a huge difference in how well you’re covered in an accident.

Insurers sometimes called this uninsured/underinsured motorist coverage. This part of your policy protects you if you have losses caused by a driver who doesn’t have auto insurance. It also protects you if another driver doesn’t have enough coverage. The problem is more common than you might realize.

For example, in some areas, the minimum requirements for liability coverage may be as low as $5 thousand. Here, the limit applies to damage caused to the property of others. Often, a separate limit applies to expenses due to bodily injury in an accident. Now, imagine that someone damages your vehicle and they only have 5 thousand in coverage. Can you fix or replace your car for $5 thousand?

Maybe not. This is where underinsured motorist coverage can save the day. If your car is damaged and the person at fault doesn’t have enough coverage, your own policy can pay the difference. The same is true if the person who damaged your vehicle doesn’t have coverage at all. Your own policy can come to the rescue. Without this coverage, your choices may be to sue — or hope the other driver pays the difference without going to court. You might even have to pay the difference out of your own pocket. Luckily, uninsured motorist coverage is affordable, which makes it an easy solution.

How many drivers are uninsured?

Uninsured drivers are more common than you might realize. Some estimates place the number of uninsured drivers at nearly 15%. In certain areas, more than 20% of drivers are uninsured.

Underinsured drivers can be more difficult to measure.

This is because drivers may not know they’re underinsured until they cause a loss and become liable. The average cost of a new car is over $35 thousand in the US. Values can be even higher for trucks and SUVs, which are becoming more common.

How much is your car worth?

A total loss may exceed the coverage limits of many policies — assuming the other driver has coverage at all.

Either way, this part of your policy protects you if someone causes an injury or damages your vehicle. If they don’t have enough coverage, your policy picks up the difference, up to the limits you choose.

Uninsured/underinsured coverage puts you back in the driver’s seat. It also allows you to insure your car for its actual cash value.

Schedule a policy review

If you have questions about your policy, just reach out to your agent or broker. Most insurers recommend a policy review about once per year. Life changes, after all. Your coverage needs might also change. This might be the perfect time to customize your coverage so it protects you and your family.

Have any questions? We can help.

Contact us—we can help you access and use your MyMills portal and app.
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