Auto liability insurance is mandatory in most states; however, many drivers choose to go without coverage. According to the Insurance Research Council, about one in eight drivers (13%) don’t comply with the law and, in some states, this number is as high as 25%. This makes carrying Uninsured and Underinsured Motorists (UM/UIM) Bodily Injury insurance critical to protect you and your family on the road.
Auto Liability coverage protects you from claims that a third party may make against you as a result of a vehicular accident. UM Bodily Injury coverage covers your medical expenses, lost wages, and other injury-related expenses when the other driver is at fault and not insured. For example, let’s say you are involved in an accident with a driver who’s responsible for the crash, but chose to go without Liability insurance. You are seriously injured, incurring tens of thousands of dollars in medical expenses that include a hospital stay and rehabilitation treatment. You are also unable to work for a several months, losing thousands of dollars in income. The UM Bodily Injury coverage portion on your policy will pay for your medical expenses and lost wages as a result of the accident up to the limits. If the limits on your policy for UM Bodily Injury are $500,000/$1,000,000, you will have up to $500,000 per person in coverage for a single accident and up to $1 million for all injuries sustained by all other people (for example, your passengers) in the accident. Depending on the state, the insurance company may or may not require you to identify the other vehicle/driver. Many states will cover a hit and run incident, as well.
UIM Bodily Injury coverage also protects you in the event that you’re injured in an accident by another driver who negligently caused your injuries but has insufficient liability coverage on his or her vehicle. In this case, if you were in an accident with an at-fault, underinsured driver and were seriously hurt, the liability portion of the driver’s policy would pay for the expenses you incurred, including lost wages and any pain and suffering, up to his or her policy amounts. UIM Bodily Injury coverage under your policy will then cover the excess amount up to the limits you have selected. Underinsured coverage may also be referred to as an Underinsured Motorists clause or endorsement or SUM, which is an abbreviation for Supplementary Underinsureds Motorist coverage.
State requirements for UM/UIM Bodily Injury insurance vary. Some states make the coverage optional while others require that specific limits be carried. Regardless of state requirements, UM/UIM Bodily Injury insurance is a cost-effective solution to help protect you and your family against the potentially high costs that can result from an accident with an uninsured or underinsured driver.
You buy Auto Liability insurance to protect your assets in the event of an accident where you are at fault. Provide yourself with similar protection in the event an uninsured/underinsured driver causes injuries to you or your family. Excess Uninsured/Underinsured Motorists limits on a Personal Umbrella policy are also available to make sure you have sufficient coverage in the event of a serious accident with an individual who has little or no insurance. Excess coverage under your Umbrella policy will kick in once the primary UM/UIM Bodily Injury insurance under your Auto policy is exhausted.
Owens Group specializes in working with family offices and wealth advisors to provide tailored insurance programs to address the specific needs of high-net-worth professionals. We can also assist individuals with purchasing Auto insurance and the various coverages and amounts that fit their risk profile. For more information, please contact Joe Ehrlich at 201-408-3512, or Maureen Conn at 201-408-3514.