Understanding auto insurance is no piece of cake. Furthermore, when it comes to legal requirements, every state is different.
For this reason, working with a reputable auto insurance agency is always in your best interest. The right agent can help you meet your legal requirements and ensure you’re getting adequate coverage that’s right for you.
One of the most complicated aspects of auto insurance for many drivers is a coverage type called uninsured and underinsured motorist coverage. This is what we’ll be discussing on the blog today.
Uninsured and Underinsured Motorist Coverage Explained
First off, when you see the term “uninsured and underinsured motorist coverage” on your policy, it will often be abbreviated as UM/UIM coverage.
Many people find UM/UIM coverage confusing, and it’s understandable. The term seems to imply that the insurance will be beneficial to drivers who are uninsured or underinsured. However, it’s essential to note that this isn’t the case at all.
UM/UIM coverage covers the motorist who purchases this type of coverage. Its use comes into play if the same motorist ends up in an accident with an uninsured or underinsured motorist.
Again, this type of insurance is optional in some states and mandatory in others. In Iowa, UM/UIM coverage is automatically included in most car insurance policies. At the same time, you are not required by law to have it by law. If you decide not to have it, you must reject the coverage in writing.
Types of UM/UIM Coverage to Consider
There are, in fact, three different types of coverage that fall under the umbrella of uninsured motorist insurance:
1. Uninsured Motorist Bodily Injury Coverage (UMBI Coverage)
This coverage applies when you are injured as the result of a collision caused by a driver who was on the road illegally without any liability coverage. UMBI coverage will typically cover the medical expenses, lost wages, and pain-and-suffering of you and your passengers (if any) and/or other approved drivers of your insured vehicle.
2. Underinsured Motorist Bodily Injury Coverage (UIMBI Coverage)
Underinsured drivers do have insurance, but it’s not comprehensive. In other words, if they caused a collision, their liability coverage may barely make a dent in the damages they owe to the other driver.
UIMBI coverage supplements these drivers’ low liability limits.
3. Uninsured Motorist Property Damage Coverage (UMPD Coverage)
If you live in Iowa, this type of coverage is rather irrelevant because it’s not offered in the state. Other states do offer uninsured motorist property damage coverage, however.
Briefly, this coverage provides compensation when you are in an accident where the at fault driver is uninsured or underinsured and has caused damage to your car.
At this point, you may be wondering what you’re supposed to do if you are an Iowa resident and you encounter this scenario. If UMPD coverage isn’t offered, how can you protect yourself?
The good news is that most collision coverage will take care of this problem (after the deductible). It’s also possible to go after the uninsured driver with a lawsuit in some cases. It’s possible their assets may be seized or wages garnished.
Certain insurance agencies may even take the uninsured driver to court themselves. The reason for this would be in order to recoup coverage they’ve had to provide to you through your collision plan because the other driver’s liability coverage was nonexistent.
What Auto Insurance Coverage Is Right for You?
Midwest Insurance Solutions has the resources and exceptional staff you need to make an educated decision on the right auto coverage for you.