Why you can’t afford to be DUMB about UM (when purchasing your auto insurance)!

If you decide not to get Uninsured Motorist Insurance (UM for short) you could be setting yourself up for financial disaster after a car accident. 

Recent data shows that approximately 13% of drivers in the United States are hitting the streets without car insurance. That means 1 in 8 drivers are time bombs waiting to explode your finances, should you be hit by them and injured in a car accident. But why would someone else’s lack of insurance matter to you when you have rightly paid for auto insurance? That’s a great question and the answer lies in how insurance contracts are structured and made.  

Different Types of Insurance

When you decide to purchase insurance, there are many options that you are able to choose from, including: comprehensive, collision, liability, rental car insurance, medpay, and uninsured or underinsured motorist insurance. 

What is UM?

Every state is different in how they administer this form of insurance. Some states require it, while others do not. Some states make you sign a waiver, call it personal injury protection (PIP), and some states have both UM and PIP, while others just have UM insurance. 

Fortunately, you only need to worry about the insurance you are getting in the state in which you are domiciled. That means, whatever state your car is registered in and where you live is likely the state of your domicile. When you buy car insurance you are asked where you are domiciled, so respond honestly (despite how much cheaper it may be to buy insurance where your in-laws live). It is not worth the risk that you may not get covered in the event of an accident. 

Why is Underinsured or Uninsured Motorists’ Insurance Important to You?  

If you are a safe driver and haven’t been in an accident, why pay the extra premium? Well, the reason is twofold:

  • Other drivers are the reason you buy underinsured or uninsured motorists’ insurance. 
  • Medical costs are extremely expensive these days.

Why Other Drivers Stink

A small subset of drivers are likely responsible for the vast majority of the expensive claims. If you think about it in terms of the 80/20 rule — the law of nature that 20 percent of anything is responsible for 80 percent of the outcomes — a small number of reckless drivers are the cause of the majority of the accidents. If you know anything about insurance rates, then you know that they go up considerably after you have caused one accident, let alone two or three. So, the cost to the driver is a lot more money, which means they are likely to have purchased the least amount of insurance mandated by the state. The majority of states have insurance minimums that are too small to cover even your basic medical bills, plus your attorneys fees, your time off from work, and your diminished earning ability.

This is compounded by the second reason: 

Darn Those Medical Expenses!

The cost of medical care has increased substantially in the past 40 years. According to one study, on a per-person basis, health care spending has increased 6-fold from 1970 – 2018 (adjusting for inflation). That’s a whopping difference of $1,832 per person in 1970, to over $11,000 in 2018.  

You will likely need extensive medical care if you are the victim of a car accident. Some care doesn’t cost very much, but other care can turn into 5 or 6 digits for even the most basic, minimally invasive back procedures such as steroid injections, ablations, or disc replacements. As a result, you could be looking at potential medical bills that are very costly and which your health insurance may not cover in full. That would leave you with exorbitant out of pocket costs that might cause you to not do the procedures that will be necessary to get you back to health. If you are not back to normal, think about your ability to work at your job and live a happy life.  What are the chances that will happen?

Check Out The Benefits of UM Insurance

UM insurance removes the headaches mentioned above and it will give you the added bonus of adding multiple figures to your settlement check. This insurance kicks in after the insurance of the at-fault driver is exhausted. For a relatively small investment, you could save yourself thousands in coverage that will absolutely save you money in the long run and ensure you and your family are protected.

This would cover you for most of the procedures that you are likely to encounter if you are in a minor to moderate accident. Back and neck injuries are the most common in car accidents and can cost multiple figures in medical bills. They also take a long time to heal from, so if you are out of work for a period of time, you will be paid. This added insurance would give you the ability to get the procedures that will bring you the quality of life you deserve and provide you with enough money to compensate you for your pain and suffering, lost wages, and lost earning capacity. Your whole family would be covered, and this insurance would kick in if your kids are in other people’s cars and those drivers and cars are underinsured. Furthermore, since this is your insurance company, you won’t face as much difficulty in getting money from them because they owe you a legal duty to give you money or face severe penalties.  

The bottom line is that the fight to get the money is not as hard as it normally would be when you are going up against an at-fault driver’s insurance because the law treats your insurance company differently. Using this insurance absolutely does not affect your insurance rates.  

Protection for Using Insurance

There are laws that protect people who elect to be covered by UM or PIP insurance that say that the insurance rates must not be increased just because you decide to use the insurance. After all, getting into the accident was not your fault, and it was also not your fault that the driver who hit you did not buy adequate insurance to cover you for the damage he or she caused. You were smart to purchase this insurance, so you should benefit from that foresight.  

Since we live in a world where distracted driving is a normal daily activity, the benefits of getting a UM or PIP policy are undeniable and, in fact, absolutely necessary to protect you, your spouse, and your kids. Don’t sit around another moment and wonder if it’s worth it. A skilled car accident lawyer knows how valuable this kind of insurance can be.