Uninsured Motorist and Underinsured Motorist Coverage – Do you need it?!

Liability insurance is mandatory in the state of Wisconsin– along with most other states.  If you fail to drive without liability insurance you may face fines or even jail time.  If you cause an accident, it seems logical to assume that the liable party would be responsible for damages.  Liability coverage under your automobile insurance policy is most often thought of in regards to bodily injury and property damage.  This assumption is logical – however, there is another part of the liability coverage that is rarely discussed but equally important.

According to carinsurance.org, one out of every six drivers is driving without insurance (in WI, the rate is 15%) – quite a startling statistic.  If you were hit by one of these uninsured drivers and they injured you, then you would expect them (or their insurance) to pay for the damages.  What if they don’t carry any liability insurance?    Does that mean you are on the hook for all the damages that someone else caused?  No.  Your uninsured motorist coverage under your automobile insurance provides part of this coverage for you by paying for bodily injury damages sustained by a liable, uninsured motorist.  This also prevents you from having to pay any out of pocket expenses for health care costs (unlike health insurance).

Avoid headaches during a claim by being properly insured!

What happens if the person that is liable for damages has insurance, but not enough to pay for all damages?  Your underinsured motorist coverage under your automobile insurance provides another part of this coverage for you.  This coverage provides coverage for bodily injury when the liable party does not carry high enough liability limits to provide for the damages. Although only one in every six drivers is uninsured, countless more are improperly insured and may not carry high enough limits to pay for damages sustained in an accident – particularly with the rising costs of health care.

An important note regarding uninsured and underinsured motorist coverage:  it does not pay for property damage that is caused by a liable driver (i.e. damage your vehicle); it only pays for bodily injury.  Some carriers offer uninsured motorist property damage insurance, usually at an additional cost.  If you have the option to purchase it – we certainly recommend it!  If you don’t have this coverage and you get hit by an uninsured or underinsured motorist, you’d need to carry collision coverage on your automobile for property damage coverage to apply.

Uninsured and underinsured motorist coverage is an important part of a comprehensive risk management program; therefore, it’s important that you consult with your insurance professional.  Feel free to contact us directly with any questions or concerns you may have.  As always, please read your policy forms for exact coverage.