Have you ever wondered what the uninsured/underinsured motorist coverage shown on your automobile insurance bill means?  You didn't ask for the coverage, so why are you being charged for it?

Uninsured/underinsured motorist coverage, also known as um/uim, is coverage for insureds and passengers under your policy for damages that an insured person is legally entitled to collect from the owner or operator of an insured vehicle because of bodily injury arising out of a vehicular accident.

This coverage is compulsory to purchase in almost every state, which is why you bought it even though you didn't ask for it.  It is a very important coverage, however, because while purchasing auto insurance is mandatory in every state, 14-17% illegally do not purchase automobile (and thus um/uim) coverage.  Also, the minimum coverage limits that most states require are so low, they would barely pay for a doctor visit!

Here is an example of how this all works.  You get in your car in a parking lot, but before you start the engine, another driver slams into the back of your car.  Your head is whipped forward, and you have just sustained a serious neck injury.  You call your agent, and your initial medical bills are paid by your auto insurance (under your Personal Injury Protection coverage).  However, this is a serious injury requiring surgery and extensive rehabilitation.  The un-attentive driver who slammed into you, of course, carries only the state minimum limits which doesn't even cover your surgery costs.  This is when you are so happy that your state requires you to pay a small premium to insure against this type of situation.  Your um/uim coverage kicks in and pays your medical and rehabilitation bills until you are either recovered or your limit runs out.

Um/uim limits usually match your automobile liability limits, but there is some "risk management" thought that should go into determining the limits to purchase...which is why you should contact a PCG Agencies, Inc. agent to figure out what to do!
Posted 9:41 AM  View Comments

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