Uninsured Motorist Coverage

Answer:

We are often asked by clients what type of car insurance they need to have to protect themselves if they are in a motor vehicle collision. We recommend two types of coverage to everyone that drives an automobile and has insurance coverage. The first is called underinsured or uninsured motorist coverage (generally referred to as UM coverage). The second type is called medical payments coverage, and we generally refer to it as MedPay coverage. These can be very important and can have a big impact on your claim in many situations.

As an example, we recently had a client who had been in a significant motor vehicle collision. Someone had run a stop sign and pulled into his lane. He had very significant injuries and his medical expenses from the ER alone were over $200,000. Unfortunately, the at-fault driver had a state-minimum policy, which is $25,000 in liability coverage, and didn’t have any personal assets that we could pursue, so our client was left with only $25,000 in coverage to pursue for hundreds of thousands of dollars worth of injuries. If he had an uninsured motorist coverage policy, he would’ve had money from his own policy that he could have added onto the at-fault driver’s policy. There are two different types of this coverage that you can purchase. One is called added-on, and the other is called offset or difference in limits coverage. The added-on coverage is the one that you want to get. It does not offset anything from what you have purchased based upon what the at-fault driver had. In the example we talked about before, the client would have the full $250,000 to pursue on top of the at-fault driver’s $25,000. In the offset version of the coverage, he would only have an additional $225,000 to pursue because they would offset the $25,000 the at-fault driver had against his uninsured motorist policy. Make sure that you get the added-on variety. Uninsured motorist coverage is very inexpensive and it’s something that you definitely need to have. The other type of coverage — medical payments coverage — can also be very beneficial, especially if you do not have health insurance. When you’re in a motor vehicle wreck and you need treatment, the at-fault insurance carrier does not provide treatment for you and does not help you go get treatment; they simply reimburse you for your medical expenses after you’re finished with your treatment. That can be a problem if you don’t have health insurance and can’t pay for the treatment up front. When you purchase medical payments coverage, your policy will provide payment for a certain amount of medical coverage that you don’t have to pay out of pocket, and then you still can pursue that coverage later when you go after compensation from the at-fault driver’s policy. Like uninsured motorist coverage, medical payments coverage is very inexpensive and is something you should definitely have because it can protect you when these worst-case scenarios happen. Please make sure you have these types of coverage, and you’ll be thankful for it later.