When it comes to insurance, there’s a lot of confusing terminology involved that can be difficult to understand. We have years of experience in dealing with insurance agencies and can help clear up some of this confusion. In this post we’re specifically going to focus on uninsured vs. underinsured motorist coverage.
What is Uninsured Motorist Coverage?
Uninsured Motorist Coverage is frequently abbreviated UM. Let’s assume that the same vehicle strikes you and your family and causes terrible injuries but has no insurance. You can then look to your own insurance company for uninsured motorist coverage if you paid for it. For a moment let’s assume that your family has three cars and they each have $250,000 of uninsured motorist coverage. In Missouri, they are sometimes able to stack these policies meaning that instead of $250,000 you could potentially recover $750,000 (250,000 x 3 = $750,000) as a result of being struck by an uninsured motorist.
This is why we advise all of our client’s to buy both uninsured and underinsured motorist coverages. Additionally, you should know about the penalty laws in Missouri. If you are hurt by another but do not have insurance on your car, you will not be compensated for your pain and suffering. If you are injured by someone that strike’s you and you do not have any insurance, you can sue them, but all you’re entitled to is the cost of your medical bills.
If you have an insurance coverage question, please contact us. Recently we were able to recover an additional $225,000 for one of our clients and an additional $100,000 for another client as a result of knowing the law and finding additional insurance coverages.
What is Underinsured Motorist Coverage?
Underinsured Motorist Coverage is frequently abbreviated UIM. In Missouri and Illinois, underinsurance motorist is additional coverage that you buy through your own insurance provider. This coverage comes into play if you are severely injured by someone else’s negligence, allowing you to get paid for all of your harms and losses.
Let’s take a bad collision case in Missouri for example. Let’s say the person who causes the auto accident (the defendant) has the minimum required amount of insurance available, which is $25,000 per policy and $50,000 per occurrence. You’re driving with your family when suddenly you’re hit from behind by another vehicle. We hope this never happens to you, but in this hypothetical scenario let’s say you all have terrible injuries and fractures.
Because the defendant that did this to you only has $50,000 of insurance, the most the three of you could get in total is $50,000, or a little less than $17,000 each. However, if you have underinsured motorist coverage of a million dollars you would be able to collect the $50,000 from the defendant and then get an additional million dollars from your own insurance company. This million dollars is underinsured motorist insurance.
Uninsured Vs. Underinsured Motorist Coverage – Which One Do I Need?
The answer is both! We recommend that you purchase both uninsured and underinsured motorist coverage from your insurance provider if you can afford it. This will ensure that you receive maximum compensation in the event of an accident.
According to a 2021 study by the Insurance Research Council (IRC), they found that 12.6% of all driver in the U.S. (1 in 8 drivers) are uninsured. Specifially they found that 16.4% of drivers in Missouri are uninsured, ranking us #12 in the nation. In Illinois the number is 11.8%, ranking them #24.