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.
Reference:
https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists
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