Do I Need Uninsured Motorist Coverage?

Do I Need Uninsured Motorist Coverage?

You'll need uninsured motorist (UM) coverage to drive if you live in a state where it's mandatory; in others, it's optional. Even if your state doesn't require it, adding the extra coverage to your policy may be worth it. Without it, you could be on the hook for accident-related expenses if you're in a crash with an uninsured or hit-and-run driver.

Tip: If you don't have uninsured motorist coverage, you're financially responsible for injuries and damages from an accident with an uninsured driver.

Uninsured motorist insurance may consist of two parts: bodily injury and property damage. In some states, they are packaged together; in others, you must purchase them separately. We'll go over the specific coverage included in each component of UM coverage in the next section.

Check out the table below to see if your state requires uninsured motorist coverage:

^*New Hampshire doesn't require car insurance, but drivers who opt to purchase it must have uninsured motorist bodily injury and uninsured motorist property damage coverage.

^**Rhode Island requires uninsured motorist coverage bodily injury if your liability limits are above the state minimum. UM coverage includes underinsured motorist, bodily injury and property damage coverage.

^***Virginia doesn't require drivers to buy car insurance if they can cover accident-related losses another way. However, drivers who purchase insurance must include uninsured and underinsured motorist coverage in their policy.

What Does Uninsured Motorist Insurance Cover?

UM and underinsured motorist (UIM) coverage can cover injuries and property damage if you're hit by a driver who doesn't have insurance or whose policy limits are too low to cover the injuries and damage they cause. UI/UIM may be packaged together or sold separately, depending on where you live.

In some states, UM property damage doesn't cover vehicle damage after a hit-and-run. In those states, you need to file a claim under your collision coverage to have your insurer cover vehicle repairs.

An uninsured motorist policy may consist of one or both of the following components:

• UM/UIM bodily injury: May cover medical bills, lost wages and pain and suffering for you and your passengers if an uninsured, underinsured or hit-and-run driver causes an accident.
• UM/UIM property damage: Can help pay for repairs to your vehicle and other property—and may cover a rental car—if you're hit by a driver who doesn't have insurance, doesn't have enough insurance or leaves the scene of the accident. You don't typically have to pay a deductible if you file a claim under your UM bodily injury coverage, but, depending on your state, UM property damage may have a deductible that you must pay before your insurance kicks in.

Tip: You need uninsured motorist bodily injury even with health insurance. Your health insurance policy only covers you and your eligible dependents—not any other passengers in your car. Plus UM provides wider coverage than health insurance.

Learn more: What Are the Different Types of Car Insurance?

Benefits of Uninsured Motorist Coverage

Uninsured motorist coverage can give drivers added peace of mind by providing multiple layers of financial protection after an accident with an uninsured or hit-and-run driver. Not only does uninsured motorist coverage minimize out-of-pocket expenses by paying for accident-related medical bills, but it also replaces lost wages if you (or your passengers) can't work while recovering from your injuries.

If you have UM property damage coverage, you may be able to file a claim with your insurer to have them pay for your vehicle repairs, and in some cases, a rental car. If your policy has a deductible, you must pay for your share of the loss before your coverage kicks in.

How Much Does Uninsured Motorist Coverage Cost?

Uninsured motorist coverage costs about $5 per month or $67 per year, on average, according to the Hanover Insurance Group. However, costs vary. Compared to other types of coverage you can include in an auto insurance policy, uninsured motorist coverage tends to be relatively inexpensive.

If you live in a state where the number of uninsured drivers is higher than average, you'll likely pay more than you would in a state with fewer uninsured drivers. The policy limits you select also affect the price of coverage. Increasing your limits above the state minimum provides added protection and is often a good idea. However, it will cost more than maintaining the minimum coverage required.

Learn more: Factors That Affect Your Car Insurance Costs

How Much Uninsured Motorist Coverage Should I Get?

The amount of uninsured motorist coverage you should get depends on where you live and your risk tolerance:

• Carry enough UM coverage to meet state requirements. Drivers who live in states where UM is required must purchase enough coverage to meet the state's minimum requirements. Motorists in states where UM is optional may choose not to purchase coverage at all.
• Consider UM coverage equal to your liability coverage. Regardless of whether it's required or not, a general rule of thumb is to select uninsured motorist bodily injury policy limits that are equal to your liability coverage limits.In some states, doing so is a requirement.

For example, let's say you have bodily injury liability limits of $100,000/$300,000. This means $100,000 is the maximum amount the insurer will pay for injuries per person and $300,000 is the maximum amount they will pay for all injuries per accident. Consider selecting the same limits for your UM bodily injury coverage. The key is to make sure you have enough coverage to protect your assets if you're in a serious accident because the state minimum isn't usually enough.

If you have UM property damage liability, the limit should be the value of your vehicle.

The Bottom Line

Uninsured motorist coverage is one of many auto insurance coverages that can help protect your finances in the aftermath of an accident. Some states require drivers to purchase it, and in others, it's optional. Even if UM isn't required where you live, it's worth considering adding it to your policy, given the millions of uninsured drivers on the road.

To help decide whether including it in your policy is the right move, consider whether you would be able to cover the costs of accident-related injuries and vehicle repairs if you're hit by an uninsured driver.

If cost is a concern, check out Experian's car insurance comparison tool. It allows you to compare quotes from dozens of top insurance providers so you can see if one fits your budget.