[Avera Law Firm] Uninsured Motorist Coverage: What is it and do you need it?
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Mark Avera
Feb 22, 2007, 6:31:02 AM2/22/07
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For people who contact us regarding auto insurance issues, one of the least understood coverages is uninsured motorist coverage (UM). Why don't you pull out your auto policy and we'll go over this coverage so you understand exactly what kind of coverage you have and how much. Go to the declarations page that lists your car(s), your coverages (bodily injury, collision comprehensive, UM, etc) and let's figure it out together.
UM is the coverage on your policy that pays you and your loved ones when someone who doesn't have any bodily injury liability coverage, or doesn't have enough, crashes into you and injures you. And this happens frequently on our roads and highways. But how does it work? And when does it come into play? Let's use an example to illustrate how it works.
Let's say you own two cars and your auto insurance is with the Acme Insurance Co. While driving to work one morning, someone runs a red light and crashes into you. The crash results in you suffering a severely herniated disk in your neck requiring surgery. Unfortunately, the person that caused the crash carries only the minimum amount of insurance required by law; $10,000 in property damage and $10,000 in personal injury protection benefits (PIP).
That means their policy has $10,000 to fix your car, $10,000 in PIP benefits to pay for their medical bills and lost wages. There is nothing on their policy to pay you for your surgery or what you have to go through. So who do you look to for coverage of your damages? Hopefully the UM on your policy.
In this circumstance, Acme is going to pay you from your own policy, under UM coverage, because the person that caused the crash has no insurance to cover your persoanl injuries.
So how much will ACME pay? It depends on how much coverage you have. Let's illustrate some more in this example.
The two cars you have insured with Acme have bodily injury coverage in the amount of $50,000 per person and $100,000 per accident. By law, Acme must sell you an equal amount of UM coverage unless you sign a form with your agent rejecting UM, selecting lower UM limits, or electing non-stacking coverage. Never, ever sign these forms. If an agent encourages you to sign these forms, find another agent. He or she isn't looking out for the best interests of you and your family.
In our example, you have $50,000 per person and $100,000 of UM coverage. What's more, UM is unique in auto coverage because you get to "stack" your UM coverage by the number of cars on the policy. With two cars, you get $100,000 per person and $200,000 per accident of UM coverage. If you had three cars, $150,000 per person and $300,000 per accident of coverage. If you reject UM, or elect lower UM limits, or elect "non-stacked" UM coverage, your coverage amounts are lower. Again, never sign these forms; they only serve to reduce your coverage.
If your policy provides different amounts of coverage, say, $10,000/$20,000 or $100,000/$300,000, just substitute your coverage amounts for the $50,000/$100,000 we used in our example and mulitply it by the number of cars insured on the policy.
If on your declarations page, listing your coverages, you don't see UM coverage, or you see "rejected" or "non-stacked", call your agent and get that removed.
In our example above, our injured party has $100,000 in UM benefits available to him because he had $50,000 perperson of UM available to him times 2 cars for total UM benefits of $100,000.
What does the per person and per accident mean on the policy? In our example, our injured driver has $50,000 of UM times two cars available to him. But if mulitple people were riding with him, and they were all injured, there would be $100,000 per accident times two cars for a total of $200,000 of UM coverage available to everyone in the car. Simply put, per person is the amount of coverage for one person while per accident applies when they are mulitple people hurt.
What if your agent tells you that UM or stacking makes your coverage more expensive? Ask them to quote you premiums with UM and without. With stacking and without. The difference is premiums with UM is negligible compared to other coverages like collision or PIP.
Never let an agent tell you that you don't need UM because you have PIP on your policy. PIP only pays for medical bills and loist wages and those payments are capped at $10,000; an amount that is almost certainly used up if you spend a day or two in the hospital. On the other hand, UM pays for all of the damages you may be entitled to in an auto accident, including pain and suffering, up to your policy limits. PIP does not cover anything for pain and suffering. If an agent gives you this explanation, walk out the door and find an agent who is looking out for you and your family and not the company for which he or she is writing the policy.
Lastly, remember that without UM coverage, if you or a family member are injured by a driver who doesn't have bodily injury coverage (which is not required by law) or someone who doesn't have enough, you are out of luck in terms of getting your damages covered. You buy UM to protect yourself and your family from just this kind of occurrence. And never, ever reject UM, elect lower UM limits, or elect non-stacking coverage.
If you have a question on UM coverage on your policy, or some other insurance question, feel free to post a question at our website and we will be happy to answer it for you.
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Posted By Mark Avera to Avera Law Firm at 2/22/2007 05:47:00 AM
UM is the coverage on your policy that pays you and your loved ones when someone who doesn't have any bodily injury liability coverage, or doesn't have enough, crashes into you and injures you. And this happens frequently on our roads and highways. But how does it work? And when does it come into play? Let's use an example to illustrate how it works.
Let's say you own two cars and your auto insurance is with the Acme Insurance Co. While driving to work one morning, someone runs a red light and crashes into you. The crash results in you suffering a severely herniated disk in your neck requiring surgery. Unfortunately, the person that caused the crash carries only the minimum amount of insurance required by law; $10,000 in property damage and $10,000 in personal injury protection benefits (PIP).
That means their policy has $10,000 to fix your car, $10,000 in PIP benefits to pay for their medical bills and lost wages. There is nothing on their policy to pay you for your surgery or what you have to go through. So who do you look to for coverage of your damages? Hopefully the UM on your policy.
In this circumstance, Acme is going to pay you from your own policy, under UM coverage, because the person that caused the crash has no insurance to cover your persoanl injuries.
So how much will ACME pay? It depends on how much coverage you have. Let's illustrate some more in this example.
The two cars you have insured with Acme have bodily injury coverage in the amount of $50,000 per person and $100,000 per accident. By law, Acme must sell you an equal amount of UM coverage unless you sign a form with your agent rejecting UM, selecting lower UM limits, or electing non-stacking coverage. Never, ever sign these forms. If an agent encourages you to sign these forms, find another agent. He or she isn't looking out for the best interests of you and your family.
In our example, you have $50,000 per person and $100,000 of UM coverage. What's more, UM is unique in auto coverage because you get to "stack" your UM coverage by the number of cars on the policy. With two cars, you get $100,000 per person and $200,000 per accident of UM coverage. If you had three cars, $150,000 per person and $300,000 per accident of coverage. If you reject UM, or elect lower UM limits, or elect "non-stacked" UM coverage, your coverage amounts are lower. Again, never sign these forms; they only serve to reduce your coverage.
If your policy provides different amounts of coverage, say, $10,000/$20,000 or $100,000/$300,000, just substitute your coverage amounts for the $50,000/$100,000 we used in our example and mulitply it by the number of cars insured on the policy.
If on your declarations page, listing your coverages, you don't see UM coverage, or you see "rejected" or "non-stacked", call your agent and get that removed.
In our example above, our injured party has $100,000 in UM benefits available to him because he had $50,000 perperson of UM available to him times 2 cars for total UM benefits of $100,000.
What does the per person and per accident mean on the policy? In our example, our injured driver has $50,000 of UM times two cars available to him. But if mulitple people were riding with him, and they were all injured, there would be $100,000 per accident times two cars for a total of $200,000 of UM coverage available to everyone in the car. Simply put, per person is the amount of coverage for one person while per accident applies when they are mulitple people hurt.
What if your agent tells you that UM or stacking makes your coverage more expensive? Ask them to quote you premiums with UM and without. With stacking and without. The difference is premiums with UM is negligible compared to other coverages like collision or PIP.
Never let an agent tell you that you don't need UM because you have PIP on your policy. PIP only pays for medical bills and loist wages and those payments are capped at $10,000; an amount that is almost certainly used up if you spend a day or two in the hospital. On the other hand, UM pays for all of the damages you may be entitled to in an auto accident, including pain and suffering, up to your policy limits. PIP does not cover anything for pain and suffering. If an agent gives you this explanation, walk out the door and find an agent who is looking out for you and your family and not the company for which he or she is writing the policy.
Lastly, remember that without UM coverage, if you or a family member are injured by a driver who doesn't have bodily injury coverage (which is not required by law) or someone who doesn't have enough, you are out of luck in terms of getting your damages covered. You buy UM to protect yourself and your family from just this kind of occurrence. And never, ever reject UM, elect lower UM limits, or elect non-stacking coverage.
If you have a question on UM coverage on your policy, or some other insurance question, feel free to post a question at our website and we will be happy to answer it for you.
--
Posted By Mark Avera to Avera Law Firm at 2/22/2007 05:47:00 AM
Kathy Watts
Feb 23, 2007, 1:52:33 PM2/23/07
to Avera-L...@googlegroups.com
Thanks for the information. I just got talked out of that but I am going to call and change it.
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