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According to a 2017 study by the Insurance Research Council, one in eight drivers didn’t carry insurance in 2015. And getting into an accident with one of those drivers can end up costing you big. To protect yourself, consider buying uninsured motorist coverage.
The cost of uninsured motorist coverage will vary depending on such factors as your age, location and driving experience. As a general rule, expect to pay around 5% of what your auto insurance costs yearly.
That means if you pay $1,300 a year for your policy, uninsured motorist coverage would cost under $6 a month.
Uninsured motorist coverage typically may come with a deductible, so ask your insurance company. If a deductible applies, you’ll choose how much you want it to be when you’re buying insurance. You’ll pay this amount before your insurance will pay for car repairs or medical bills.
Weigh how much car repairs would cost against how much you’d want to pay out of your own pocket. The higher you set your deductible, the lower your insurance premiums will be.
Consider buying the same amount of uninsured or underinsured motorist coverage as you have for liability insurance, or at least match your state’s liability insurance requirements. By buying this protection, you’re replacing the liability coverage that the other driver should have kept on their policy. You want this coverage to pay out enough that you could replace your car and pay for medical bills comfortably if the other driver can’t pay these expenses.
Normally when someone hits your car, they’ll give you their insurance information so that you can file a claim with their insurance company. But what if that driver doesn’t have insurance? You’d have to collect money from them, and that can be a time-intensive and stress-inducing process. You may even have to litigate.
This is why uninsured motorist coverage can be valuable. If another driver doesn’t have insurance, you won’t have to go back and forth with them to receive compensation. Instead, your own insurance will cover your expenses.
There are two types of uninsured motorist coverage.
You’ll often hear underinsured and uninsured coverage mentioned together. Some states require you to carry both types of coverage, while others require one or the other. They both operate in similar ways, but underinsured coverage is used when the driver has some insurance but doesn’t have enough to cover your medical expenses or damage to your car.
Like uninsured coverage, underinsured has two types:
You’re driving on the freeway, when you’re rear-ended by another car. There’s severe damage at the rear of your car, and you feel a slight pain in your neck. After you and the other driver pull over to exchange information, you learn that they don’t have insurance.
Fortunately, you have uninsured motorist coverage. Your UMBI insurance pays for your trip to the doctor to get your neck checked out, and your UMPD insurance pays for your car repair bill.
Buying uninsured motorist coverage can be a wise decision for many drivers. Think about whether these reasons make the extra coverage worth your while:
See how much risk you have of getting in an accident with an uninsured driver, based on statistics in your state. You can type in your state to narrow down the list.
|State||Uninsured motorist %|
|District of Columbia||15.60%|
Your state may require you to buy uninsured motorist coverage. Even if it doesn’t, buying a policy may make sense: Uninsured drivers are more common than most people think.
Don’t be afraid to shop around for the best price. You can find coverage that works for you by comparing car insurance companies.
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