By now, I assume that most people have an understanding of Uninsured/Underinsured Motorist coverage (UM/UIM coverage), but I wanted to take five minutes and jot a note down about its growing importance.
A quick synopsis: UM/UIM is a type of coverage that protects you in the event that you are injured by an uninsured (or underinsured) driver. This is different than liability coverage, which insures you financially from damage to another person and their vehicle if you cause a wreck.
In Colorado, you are required to have liability insurance with minimum policy limits of $25,000 per person/$50,000 per accident. The law requires that you have this insurance so that everyone on the road will theoretically be insured when they cause a car accident, a motorcycle accident or any accident that causes injuries to a third party.
Unfortunately, there are many people who violate the law and do not have liability coverage at a given time. Whether it is because they have accidentally let their coverage lapse, or whether they intentionally have not purchased liability coverage, that is bad for you if you are hit by that person.
That is where UM/UIM comes into play. When you are shopping for liability coverage, your insurance company is required to offer UM/UIM to you in the same amount as the liability; e.g.; if you choose 25/50 liability coverage, the insurer will offer you 25/50 in UM/UIM coverage. You can decline UM/UIM, but you must do so by signing a written waiver. YOU SHOULD NOT DECLINE UM/UIM!
Sorry for yelling. Many, many drivers don’t carry liability insurance. Many more drivers carry only the minimum liability limits of 25/50.
Here’s a hypothetical: Let’s say that you are driving home from work, and that someone runs a red light and hits you fairly hard, going about 30 m.p.h.
The car is totalled, and you get thrown around the inside of your vehicle violently, hitting your head on the steering wheel in the process. An ambulance is called, you go to the E.R., they check you out and you have a mild concussion, broken shoulder from the seat belt and some torn knee ligaments. You require surgery on the knee, and treatment for your shoulder. You are looking at four months of physical therapy as well, to get the knee and shoulder back to “normal”.
Then you find out that the other driver was not carrying liability insurance. Your medical charges are $30,000.00 after the surgery and some rehab. You’ll have more bills.
Without UM/UIM, you’d be responsible for this expenditure. Totally. You could try and sue the individual for the damages, but most persons who don’t carry liability insurance are “judgment proof”, meaning they don’t have any money or assets that you could recover. Or, you might not want to sue someone and take away their belongings. You’re out of luck.
With UM, you are protected from this scenario by your insurance choice. This is very important.
Same hypothetical, except assume that the person who hit you had some insurance. Let’s say he had $25/50 coverage. That would mean that his liability coverage would pay for $25,000.00 of your expenses, but no more. You would be responsible for the rest of the money.
In either situation, a person can be devastated financially by a situation like this, on top of their injury and loss of a vehicle.
If you buy UM/UIM insurance, it typically costs about $25 or less per vehicle added to your policy premium. In my opinion, it is more important than liability coverage to a responsible driver.
By the way, the “hypothetical” that I gave is actually a real life case that I have had on more than one occasion.
If anybody has any experience with this situation, let me know. Also, ask questions in this thread if you’d like.