Most people I talk to don't really understand Uninsured Motorist coverage. They may or may not have it on their policies, but either way, they don’t really understand what it is or how can help them. I would like to take a few minutes and explain what this coverage is, whether you should have it, and how much you should have.
Most people know of Uninsured/Under-insured Motorist coverage as UM coverage, so for simplicity's sake, I will refer to it as UM coverage.
UM coverage is probably the most misunderstood coverage in car insurance. A lot of people confuse this with Comprehensive and Collision coverage, which we will discuss in a future blog. UM coverage has nothing to do with vehicle repairs or replacement. It is very similar to Bodily Injury liability coverage in that it pays for medical bills, lost pay, rehabilitation treatment, and even funeral costs, except it isn't paying those things for someone you have harmed. It's the opposite – UM coverage covers you, the insured, in the event that someone's vehicle hits your vehicle and results in an injury (or death), and that driver either doesn't have car insurance, or doesn't have enough Bodily Injury coverage to pay your medical bills or funeral costs.
UM coverage has the same limits structure as Bodily Injury: $10,000/$20,000, $25,000/$50,000, $50,000/$100,000, $100,000/$300,000 and $250,000/$500,000. The first number is how much the insurance company will pay per person in an accident, and the second number is how much the company will pay total for the accident under your Uninsured Motorist coverage.
There is also an option to stack your UM coverage limits. This simply means that for each vehicle you own, you can stack those limits. So if you have $25,000/$50,000, and you have two vehicles on the policy, you actually have $50,000/$100,000 available to you.
I'll take that a step further to make sure you understand... Let's say you have the same stacked limits, $25,000/$50,000, but you actually have three vehicles on your policy. How much UM coverage do you have available to you in the case that someone were to hit you and they do not have auto insurance? If you guessed $75,000/$150,000, you are correct! Of course, this stacked UM coverage will cost you more since it is giving you more coverage.
So how much UM coverage should you carry? Most experts recommend that when buying UM coverage you should match the limits with your Bodily Injury limits. So if you have $100,000/$300,000 on your Bodily Injury, you would carry the same on your UM coverage. If you have more than one car on your policy, and are really concerned about being injured by an under-insured or uninsured driver, you should consider purchasing it as stacked UM coverage.
If you've opted not to carry UM coverage, I recommend that you reconsider. The latest studies suggest that in the state of Florida, 3.2 million people are driving around without any car insurance. Florida has one of the highest uninsured rates in the country!
Hopefully by now you have a solid understanding of what UM coverage is and how much coverage you should have. If you would like to further discuss your UM coverage options or any other coverage, just email me or message me on Facebook or Twitter. I'm happy to help!
Read part one (Personal Injury Protection) here.
Read part two (Bodily Injury Liability) here.
Read part four (Property Damage) here.
Read part five (Other Coverages) here.