Understanding UM and UIM coverage

| Feb 9, 2021 | Motor Vehicle Accidents

According to the National Highway Traffic Safety Administration, or NHTSA, in 2018 a total of 6,734,000 motor vehicle crashes occurred nationwide, not including unreported ones. Out of these incidents, 2,710,000 individuals sustained injuries. This data shows that automobile accidents are not uncommon in the U.S. 

Auto insurance is an important (mandatory in most states) protection to have. What do you do if you have insurance, but the other party’s is nonexistent or inadequate, though? This is where uninsured motorist, or UM, and underinsured motorist, or UIM, coverage comes in. There are some basics you need to be aware of when it comes to these forms of indemnity. 

1. Are they required?

Texas requires drivers to carry liability insurance, but not UM or UIM insurance. However, the state does compel insurance companies to present it to you as an option. You may reject it in writing though. 

2. How much coverage do you need?

You smallest amount of UM coverage you may have in the Lone Star State is 30/60. Essentially, this means that the policy shells out a maximum of $30,000 for the harm done to/death of one individual. The second value ($60,000) is the highest amount covered for all third party injuries and deaths involved. 

3. What exactly do they cover?

UM insurance pays for your medical expenses when the other driver does not have coverage. It also applies to hit-and-runs. UIM indemnification makes up the difference if the other person’s is not sufficient to cover all health-related costs. These policies typically do not include damage to your vehicle. Companies may add an uninsured motorist property damage, UMPD, provision for an additional fee though. It is actually a requisite in Texas, with a $25,000 minimum coverage amount. 

UM insurance and UIM insurance shield you from the price of other people’s lack of coverage. They may help you avoid major financial setbacks due to automobile accidents.