When it comes to auto insurance, drivers can have a ton of options to choose from tailored specifically according to their criteria. However, one crucial factor of an auto insurance policy, which is often overlooked, is the uninsured motorist coverage (UM/UIM). Even though it’s relatively costly, it can still provide you with financial protection in case of any unfortunate events where you’re at a loss of funds. This blog will help explore the many opportunities as well as the risks associated with uninsured and underinsured motorist coverage plans as a part of your auto insurance policy.
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What does Uninsured Motorist Coverage Mean?
Often used as UM, uninsured motorist coverage is a type of auto insurance designed to protect an uninsured driver following an accident. As in most cases, drivers with no insurance are not financially capable of paying for the damages caused by an accident they’re either involved in or have caused, leaving the other party to bear all the expenses, including medical bills, repair costs, etc.
Uninsured Motorist generally includes two types of protection:
Uninsured Motorist bodily injury: This typically covers medical expenses, lost wages, and protection against uninsured drivers and other damages caused.
Uninsured Motorist property damage: This covers the repair and replacement of any damages caused to your vehicle or property in case of a collision from an unsinured driver.
Note: For any UM coverage to apply, the at-fault driver must be completely uninsured. This means they either have no insurance at all or are incapable of compensating for any damages they have caused.
What is Underinsured Motorist Coverage?
UM coverage allows protection in such a case when the uninsured driver is insured but their coverage rates are too low to bear any expense of the injuries or damage caused. For instance, if you’ve been involved in an accident but the at-fault driver has only minimum liability insurance, which might not even cover your medical bills or other expenses. In such cases, UIM helps make up for the difference, acting as a top-up insurance to cover the rest of the expenses on behalf of the at-fault driver.
UIM coverage is especially important in states where the minimum required insurance coverage limits are already too low for drivers to afford any unfortunate events since most of them opt for the bare minimum packages nonetheless. If you’re involved in such situations, you can be left with serious out-of-pocket charges. And that’s why underinsured motorist coverage ensures that you’re not financially strained by an accident caused by someone else’s lack of insurance.
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Benefits of UM/UIM Coverage: Why It’s Essential
Here are some of the key points on why UM/UIM is not just an optional coverage choice but a wise investment.
- Protects you against uninsured motorist coverage
As the name suggests, UM/UIM coverage protects you against uninsured drivers. According to the Institute of Insurance Information, 13% of drivers in the United States are uninsured. And in Texas, with the highest insurance rates in all of the United States, the number of uninsured drivers is up to 20%.
- Protects you against underinsured motorist coverage
This typically protects you against those collisions with drivers who have some insurance but not enough to cover the full extent of damages caused in an accident.
- Provides Coverage to Pedestrians or bicyclists
Many people assume that in order to be auto insured, you need to be the one driving the vehicle. But in this case, UM/UIM coverage also extends to anyone on the road involved in a serious accident with an uninsured or underinsured driver.
- Minimal extra cost for a larger benefit
The best part about UM/UIM coverage is that it’s relatively inexpensive. For a small portion of the increased premium, you can save thousands of dollars and gain valuable protection and financial freedom against any harmful event or injury down the road.
- Protects your loved ones
UM/UIM also extends to family members, even if they’re not in the vehicle at the time of the accident. So this offers an extra layer of protection for your loved one’s in case they were involved in a collision under your policy.
What happens if you don’t have UM/UIM Coverage?
Auto Insurance without UM coverage, the innocent party will be left at the hands of the at-fault party to cover the extended damages or, worse, pursue a potential lawsuit, which could both be time-consuming as well as hemorrhage your bank account. Even though both of these options of auto insurance are regarded as optional, it’s better to be safe than sorry and protect yourself from such unfortunate events that could financially and mentally obligate you.
In Texas, these two options are highly recommended by top insurance companies, and in some state’s it’s also a requirement. The nominal cost of adding this coverage to your auto insurance policy outweighs the potential financial burden that could result from an accident. Imagine not being able to afford necessary help due to someone else’s inadequate insurance. And always remember that it’s better to be safe than sorry when you’re on a Texas road.
FAQs
What is the deductible for uninsured motorist insurance in Texas?
There is a $250 deductible for uninsured motorist insurance in property damage claims.
Will my insurance go up if I use an uninsured motorist claim in Texas?
Uninsured motorist property damage coverage usually comes with a deductible, much like your collision coverage would. However, unlike collision coverage, an uninsured motorist property damage claim won’t raise your premium as much as a collision claim would.
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What is the UM UIM law in Texas?
In Texas, UM/UIM coverage covers both economic and non-economic damages, which include medical expenses, lost earnings, and pain and suffering. It does not cover punitive damages.
What triggers UIM coverage in Texas?
The insured party must prove fault by the on- or underinsured driver. The insured party must also prove legal damages before they are entitled to UM or UIM motorist benefits.
Are you required to have uninsured motorist coverage in Texas?
In Texas, insurance companies are obligated to offer UM/UIM coverage as part of an auto insurance policy. However, you are not required to accept it.
What happens if you get hit by an uninsured driver in Texas?
Texas is an at-fault state for car insurance, so you usually file a claim with the insurance company that covers the at-fault driver. However, with an uninsured or underinsured motorist claim, you file a claim with your own insurance company.
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