What is UM/UIM Insurance Coverage and Do I Need It?
When you purchase car insurance, you might notice options called Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM).
While they might sound technical, understanding what they are and why you need them can protect you from unexpected financial burdens after a crash.
What Is Uninsured Motorist (UM) Coverage?
Uninsured Motorist coverage protects you if you’re injured in a crash caused by a driver who doesn’t have any insurance. Unfortunately, many drivers on the road don’t carry insurance, either by choice or due to financial hardship. If you’re hit by one of these drivers, your medical bills, lost wages, and other damages will not be covered by their insurance because there isn’t any.
UM coverage steps in to cover these costs, helping you avoid paying out of pocket for injuries that were not your fault.
What Is Underinsured Motorist (UIM) Coverage?
Underinsured Motorist coverage applies when the at-fault driver does have insurance, but their policy limits are too low to cover all your damages. For example, if your medical bills and other losses total $50,000, but the other driver’s insurance only covers $25,000, UIM coverage can help cover the remaining amount.
This coverage fills the gap between the at-fault driver’s insurance limits and your total expenses, ensuring you’re not left with a large financial burden.
Why is it so important to have UM/UIM coverage?
- High Rates of Uninsured Drivers: A significant percentage of drivers are uninsured. UM coverage is a safety net for this common risk.
- Financial Protection: UM/UIM coverage protects your health, income, and savings from the costs of injuries caused by uninsured or underinsured drivers.
- Hit-and-Run crashes: UM coverage often applies if you’re involved in a hit-and-run where the responsible driver cannot be identified.
- Peace of Mind: Knowing you have this coverage means you’re prepared for worst-case scenarios on the road.
Plainly said, UNinsured coverage (UM) applies if the at-fault driver has no insurance coverage. UNDERinsured coverage (UIM) applies if the at-fault driver doesn't have enough insurance coverage.
While adding UM/UIM coverage may be optional or an add-on, it’s important and highly recommended to everyone to include it in your policy for protection. While you hope never to use it, having UM/UIM coverage can save you from devastating financial consequences after a crash with an uninsured or underinsured driver.
