Guarding From the 13% or More
Updated: Jul 12
In 2017 the Insurance Research Council found that the number of uninsured motorists on the road grew from 12.3% to 13% from 2010 to 2015. That's one in eight drivers on the road. It’s now 2019 and some suspect that this number may have increased.
Currently, 49 out of the 50 states in the United States require a minimum amount of insurance for bodily injuries and property damage. Most people will comply with the state mandates, however the key term to pay attention to is, minimum! The minimum financial responsibility requirement is commonly low and individuals tend to accept the state minimum requirement for coverage. Two of the most common reasons for this are not understanding insurance coverage, and secondly the fear of higher premiums. Most drivers lean toward the cheapest and least amount of coverage required for registration compliance. What most don’t realize is the risk they might be exposed to, and recognize that the difference between state minimum insurance coverage compared to higher coverage amounts tends to be nominal.
The topic for concern here is when an accident occurs that is someone else’s fault. In the insurance world, this is known as a “not-at-fault accident”. So what happens if you are in an accident with someone who doesn’t have insurance, and that driver is at fault? As a result, several thousand dollars of damages to property and bodily injury have occurred. Come to find out, the at-fault driver has the state minimum insurance coverage, or worse no insurance! Well, there’s actually a portion within your own vehicle insurance policy known as “uninsured and underinsured motorists coverage”, which provides coverage for uninsured and under-insured motorists. Therefore, the cost to repair or replace property damage, and treat injuries caused by someone who has no or low limits of insurance, is covered under the auto policy.
If you want to know what your uninsured and underinsured motorists coverage is, pull up the coverage on online or on your phone app. Look for the coverage amounts for uninsured and underinsured motorist coverage. In some cases, this may be stated as UM/UIM. You’ll see a dollar amount there as either a single limit, or a split limit. A single limit is an aggregate amount of coverage per incident such as $300,000 per occurrence. A split-limit provides a per person amount and an aggregate per occurrence amount such as $100,000 per person and $300,000 per occurrence. It’s important to review these limits with an insurance professional to understand and verify the coverage is adequate, and appropriately secures your finances.
I’m happy to review insurance coverages and answer questions. Feel free to reach out. There is never any obligation to do business with me or sign up for coverage. My goal is to be a personal finance resource to individuals in my community.