It is estimated that almost 1/3rd of all drivers are driving with inadequate coverage or no insurance at all. With such a high number of people with none existent insurance you have to protect yourself! This is where Uninsured and Underinsured motorist coverage becomes relevant.
WHAT IS UNINSURED AND UNDERINSURED MOTORIST COVERAGE?
Uninsured and Underinsured motorist coverage is a part of every automobile policy sold in Minnesota. Uninsured motorist coverage provides coverage to compensate you for a loss which you sustain, and which is caused by a driver who is uninsured, or inadequately insured.
Insurance companies in Minnesota are required to include uninsured motorist coverage as part of every automobile policy, unless you specifically decline it, in writing. Coverage is usually designated on the face page of your automobile insurance policy by the letter or letters "U" or "UM".
WHO IS INSURED BY MY UNINSURED MOTORIST POLICY?
When you purchase uninsured motorist coverage as part of a policy, it affords coverage for you and all members of your family who reside in your household with you. It would also include any minor children of yours who do not reside with you or your children who are away at college.
This coverage even applies when you are not operating or in a motor vehicle, so long as the motorist who caused your injuries was uninsured or underinsured.
Your uninsured motorist coverage also applies for the benefit of other passengers in your car or other people driving your car with your permission, and who are injured by an uninsured or underinsured driver.
WHEN DOES AN UNINSURED MOTORIST POLICY APPLY?
Uninsured motorist vehicle coverage comes into play whenever anyone who is insured is injured by a driver who is uninsured or underinsured. An uninsured driver includes a hit-and-run driver, so long as there is some actual contact from the hit-and-run driver's vehicle.
Underinsured motorist coverage only applies if the other driver's liability limits are lower than your uninsured coverage limits. Thus, if the driver who causes the accident has a liability policy of $30,000.00 per person, you are not entitled to any uninsured or underinsured motorist benefits if your uninsured motorist coverage is for $30,000.00 per person/$60,000.00 aggregate. If, however, you have uninsured motorist coverage of $100,000.00 per person/$300,000.00 aggregate, you could receive up to the $70,000.00 difference from your own company for an injury to one person, and up to $240,000.00 additional insurance from your own company if there were injuries to three or more of your family members, or passengers in your car.
WHAT LOSSES ARE COVERED?
Uninsured motorist coverage is intended to compensate you for both your financial and your non-financial losses which you sustain, and for which you have a legal claim as a result of the negligence of an uninsured, underinsured, or hit-and-run driver. Your financial losses would include any medical expenses which you reasonably required as a result of such an incident, any loss of income or earnings, any diminution in your ability to earn money in the future, or any assorted out-of-pocket expenses such as household and related help and assistance.
Non-financial damages include such elements as loss of ability to enjoy or engage in certain activities as a result of injuries, pain and suffering, and other such subjective losses for which you are entitled to monetary compensation under the law. There is usually no exact way of pinpointing an appropriate amount of compensation for this.
HOW MUCH UNINSURED MOTORIST COVERAGE MUST MY INSURANCE COMPANY OFFER ME?
Your insurance company is only required to issue uninsured motorist for $30,000.00 per person/ $60,000.00 aggregate, regardless of the fact that you might have a much higher liability limit (coverage which pays others for their injuries when you are at fault).
However most insurance companies will allow you to purchase uninsured motorist in an amount equal to your liability policy. Thus, if you have a $100,000.00/$300,000.00 liability policy for example, you usually will be able to purchase matching uninsured motorist coverage.
CAUTION: Many insurance companies will automatically issue a policy with uninsured motorist limits of $30,000.00/$60,000.00, even when higher liability limits have been purchased. If this happens to you, contact your insurer immediately to to have your uninsured motorist benefits raised to match your liability limits.
HOW MUCH UNINSURED MOTORIST COVERAGE DO I NEED?
The amount of uninsured coverage you need will be different for each person. To some extent the amount will be based on how much you can afford but you also must consider what you could lose without the proper limits.
If you are a high-income earner or just starting your career with the potential to have a high income, and a prolonged injury would substantially impair your earning capacity, you should have substantial UM protection. An umbrella policy with uninsured and underinsured coverage is an affordable way to add $1,000,000 of coverage to your auto policies uninsured motorist coverage.
We recommend that no one should have less than $100,000.00 per person/$300,000.00 aggregate of uninsured, underinsured and liability protection. Most people are surprised to learn that increasing the limits from 30,000/60,000 to $100,000/$300,000 can be a low a few dollars per month.
Keeping these suggested limits in mind, a good rule of thumb is match your uninsured motorist coverage with your liability coverage. That way you insure yourself and your family for the same amount your are protecting others for.
To learn more about uninsured and underinsured motorist coverage contact us and we can help review your coverages so you know you have the right coverage for you and your family.