While the vast majority of states have minimum auto insurance requirements, there are still licensed drivers on the road who do not have adequate coverage or any auto insurance at all. In fact, according to the Insurance Research Council (IRC), 14% of drivers in 2022 were uninsured. In Michigan, it is estimated that nearly 25% of drivers are uninsured. What’s more, many drivers opt for lower coverage limits, meaning they may not have enough coverage to pay for damages or injuries they cause.
Uninsured drivers can face costly fines and potential license suspensions. But if you’re involved in a car accident with an uninsured or underinsured driver, these penalties will not help to protect you against potential financial losses. Thankfully, uninsured/underinsured insurance coverage can.
At Doeren Mayhew Insurance Group, we have specialized experience in helping our clients secure the right auto insurance policies. We deliver peace of mind ahead of accidents that can lead to costly damage, injuries, and other liabilities. We work with our clients to customize their coverage to ensure safety and protection in the face of the unforeseen.
What is Uninsured/Underinsured Motorist Coverage?
This optional insurance coverage will cover costs for injuries or property damage sustained in a car accident caused by an uninsured or underinsured driver. It provides extended coverage to car accident victims to compensate for related pain and suffering, no-fault personal injury protection (PIP) medical benefits, and other losses. This coverage is important for drivers in every state, but is especially important since Michigan’s recent auto insurance reform changes.
Securing uninsured/underinsured motorist coverage ensures long-term protection for you and your family and is commonly inexpensive. When faced with such a high number of uninsured motorists on the road, this coverage provides a huge benefit.
What’s the Difference Between Uninsured and Underinsured Coverage?
While these two policies are as different as they sound, both uninsured and underinsured motorist coverages offer both bodily injury and property damage coverage options. Like liability insurance, this will help save you from paying out of pocket for medical bills, lost wages, and emotional damage related to an accident that you didn’t cause.
Uninsured Motorist Coverage (UM)
This type of policy offers essential coverage if you are involved in a car accident with someone who does not have any auto insurance. Uninsured motorist coverage is critical in this situation, as it can pay for medical bills, funeral expenses, lost wages, and pain and suffering compensation.
Underinsured Motorist Coverage (UIM)
If you’re hit by an at-fault driver who doesn’t have enough insurance to cover costs related to bodily injuries or property damage, underinsured motorist coverage can kick in to deliver additional financial protection. This coverage can go a long way in covering the full extent of the fallout from a car accident with another driver.
What is Considered “Underinsured”?
A driver is considered underinsured when their auto insurance coverage is not sufficient to fully cover the costs of an accident or damages they may cause. In other words, underinsured drivers have insurance, but the limits of their coverage may fall short of covering all the expenses associated with a serious accident. There are a few reasons for this:
Low Coverage Limits
Some drivers opt for low coverage limits to reduce their insurance premiums. This may leave them underinsured in the event of an accident, especially if medical expenses and property damage are significant and exceed their policy limits.
State Minimum Requirements
In some cases, drivers may only carry the minimum insurance coverage required by their state. While this meets legal requirements, it may not be enough to cover the full extent of damages in a severe accident.
Outdated Coverage
Drivers who have not updated their insurance policies in a while may be underinsured due to changes in their financial situation, lifestyle, or the cost of living. What was sufficient coverage in the past may not adequately protect them today.
Hit-and-Run Incidents
Uninsured motorist coverage becomes crucial in a hit-and-run accident, when the at-fault driver flees the scene and cannot be identified or does not have insurance. In these situations, uninsured motorist coverage provides financial protection for the innocent party — the victim of the hit-and-run.
How We Can Help
Even the safest and most responsible drivers may find themselves a victim of an accident caused by an uninsured or underinsured motorist. At Doeren Mayhew Insurance Group, we encourage all of our clients to invest in uninsured and underinsured motorist coverage. This surprisingly affordable coverage option ensures financial protection in the event of a car accident. Contact us today to learn how we can help you secure coverage that fits your unique needs and financial goals.