“I have full coverage.” That’s what I often hear when asking clients about their own automobile insurance. When we explore a little further, I sometimes learn that my injured client really doesn’t know how much insurance, or what types of coverage, he or she actually has.
Most of us are responsible drivers. We try to be careful on the road, and just in case we make a mistake that hurts someone, we carry “liability” insurance. When it comes to car insurance, we often first think of liability coverage. That’s the insurance which will compensate the people we accidentally injure (and protect our personal assets from the claims and lawsuits they might file). But there is another type of insurance – equally important – which too often gets overlooked. That coverage is generally known as “Uninsured and Underinsured Motorist” insurance. Unlike “liability” insurance, which pays the people we hurt, “UM/UIM” coverage pays us when we are hurt by other drivers who have little or no insurance of their own.
The sad reality is that there are many cars on the road being driven by people with little or no “liability” insurance. If one of those drivers causes injury to you or a family member, there can be no source of compensation for medical expenses, lost income, physical injuries, and the disruption of your normal life. But if you purchase UM/UIM coverage as part of your auto policy, you will be protected from these drivers up to the limits of that coverage.
I am always a bit surprised when I look at a client’s auto policy and see that they have purchased liability coverage to protect others, but have declined UM/UIM insurance. This leaves my client and their family exposed to injury from the thousands of irresponsible uninsured drivers out there. The desire to save a few dollars on a policy is understandable, but that decision can be very costly when a serious accident is caused by an uninsured motorist, or a driver who carries only “State Minimum Limits.”
I strongly encourage anyone reading this to buy UM/UIM coverage. And keep in mind that $100,000 of coverage is not as much as it used to be. Buy as much coverage as you can afford. You may find that the difference in cost between a “100,000/300,000” policy and a $500,000 (or even $1,000,000) policy is not as much as you expected. That extra coverage can be hugely important if a bad accident happens.