Did you know that there are several types of coverage that make up an auto insurance policy? Underinsured, and Uninsured Motorist Insurance are two that many people find confusing.
Your auto insurance policy must include certain coverages that are legally required in your state. But your policy may also include optional coverage. Some drivers choose these optional coverages to protect themselves more robustly when they’re on the road.
Understanding what each type of coverage offers and whether you need it or not can be confusing.
In the following article, we will be discussing one type of insurance coverage that is often confusing for motorists: Uninsured motorist coverage.
What Is Uninsured Motorist Coverage?
Uninsured motorist coverage as a blanket type of coverage may also be referred to as:
- UM coverage
- Uninsured/underinsured motorist coverage
- UM/UIM coverage
In certain states, like Wisconsin, a certain amount of uninsured motorist coverage is required. In other states, it is not required. However, it’s still recommended.
Like any other type of auto coverage, there are limits associated with uninsured motorist coverage. To meet the legal insurance requirements in the state of Wisconsin, you must have at least the minimum required amount of uninsured motorist coverage. You can check Wisconsin’s state website for updated information on this requirement as it is subject to change.
What Does UM Coverage Do?
While you may think that uninsured motorist coverage protects drivers who don’t have insurance, this isn’t the case. In fact, it’s the opposite. Liability auto coverage is what protects other drivers if you cause an accident with them.
Liability insurance is also required in most states, including Wisconsin. You need to have bodily injury liability insurance and property damage liability insurance.
On the other hand, UM coverage benefits the motorist who purchases the coverage for their plan. That’s you. It benefits you because it protects you from uninsured drivers.
There are three subtypes of UM coverage.
- The most important type of UM coverage is uninsured motorist bodily injury coverage or UMBI coverage. If you or your passengers are seriously injured as a result of an accident caused by an uninsured driver, this coverage will pay for your medical expenses and lost wages. It may also pay for pain-and-suffering or funeral costs in the event of a wrongful death.
- Another common type of UM coverage is uninsured motorist property damage coverage or UMPD coverage. It’s important to point out here that not all states offer this type of insurance. For example, you can’t get it in Wisconsin. Collision coverage, however, will usually pay for property damages caused by uninsured drivers. Collision insurance is a good optional coverage to have on your plan. If you don’t have collision coverage, you may be able to take the other driver to court for these damages.
- The final type of UM coverage is called underinsured motorist bodily injury coverage or UIMBI coverage. This type of insurance covers extensive damages and injuries that may be caused by a driver who only has a small amount of insurance.
Uninsured motorist bodily injury coverage is required in Wisconsin, but underinsured bodily injury motorist coverage is not required. At the same time, both types of insurance aren’t very expensive, and together, they are well worth paying for.
What Happens to Drivers Who Drive Without Insurance?
Doing this is illegal. If you are caught without insurance, you will receive a fine, and your vehicle may be towed. Additional legal problems will ensue if you cause an accident and do not have insurance.
Every driver can benefit from UM and UIM insurance. It’s certainly a worthwhile type of coverage to have.
Are you interested in adding this policy to your auto plan? Stop in or call us at Pagel & Associates Insurance Agency today to find out more.