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Car insurance is designed to protect your investment, you and your passengers, other motorists, and personal property in the event of an accident. It’s estimated that approximately 90% of motorists carry some level of automobile insurance. Insurance coverage includes auto liability, comprehensive, and collision. In addition to this, there are options for uninsured and underinsured motorists. What happens if you decide not to carry uninsured motorist coverage?

What Is Uninsured Motorist Coverage? 

car after an accident

Image via Flickr by Mussi Katz

While most motorists carry automobile insurance, approximately 10% of drivers don’t have any level of insurance coverage. What happens if an uninsured motorist strikes you? If you have uninsured motorist insurance coverage, your insurance company will pay for the damages, including lost wages and pain and suffering, for you and your passengers. Uninsured motorist coverage protects you and your investment even when you’re not at fault. There are two main kinds of coverage:

  • Uninsured motorist bodily injury (UMBI) coverage: This insurance coverage will take care of any medical bills, lost wages, and pain and suffering incurred by you or your passengers when involved in an accident with an uninsured motorist. Typically, there is a split limit on UMBI coverage, allowing for a limit per person and per accident. For example, $20,000 per person or $50,000 per accident would mean that if there are three people involved, they will max out at $50,000 total amongst all claimants regardless of their claims.
  • Uninsured motorist property damage (UMPD) coverage: This insurance coverage pays for damage to your vehicle and any other personal property that was damaged due to the accident caused by an uninsured motorist. This type of coverage is not available in every state.

In addition to uninsured motorist coverage, many drivers elect to add underinsured motorist coverage to their personal policy. Underinsured coverage steps in when the other driver’s insurance has maxed out at its limits and you have additional claims that need to be paid.

Is Uninsured Motorist Insurance Necessary? 

Many states require uninsured motorist insurance coverage, but even if you live in a state that doesn’t, it’s in your best interest to tack this coverage onto your insurance policy. If you consider that approximately 10% of drivers are out there with no car insurance, and others have minimal coverage, you’re taking a chance of being in an accident with one of them any time you’re on the road. If you’re in an accident with an uninsured driver, it can be extremely difficult to receive compensation for damages, medical bills, lost wages, or pain and suffering.

What Happens if I Reject Uninsured Motorist Coverage?

If you live in a state that requires uninsured motorist coverage, it may be impossible to request that it’s left off of your policy; however, drivers can essentially reject it by not carrying any type of car insurance. Drivers who are caught on the roads without proper insurance coverage can be fined, usually $500 to $1000 as first-time offenders, with higher fines for repeated violations. You can also have your driver’s license suspended, resulting in additional reinstatement fees.

What Is a Good Amount of Uninsured Motorist Coverage?

When considering adding uninsured motorist coverage, it’s essential to think about the factors involved. You’ll want to think about how much it would cost to replace your vehicle or pay off the remainder of your loan if your car is totaled in an accident. Keep in mind how many passengers you have in your vehicle on any given ride. Uninsured motorist coverage would need to be enough to cover the medical bills, lost wages, and pain and suffering for each of those passengers should you be involved in an accident.

States that require uninsured motorist coverage typically have minimum limits that may not cover your situation. You will want to ensure that you have adequate coverage, even if that means going beyond the minimum requirements.

Do I Need Uninsured Motorist Property Damage if I Have Collision Coverage? 

Collision coverage pays for the repairs after your vehicle has been damaged in an automobile accident, regardless of who’s at fault. However, it will not cover any personal property or items that were damaged inside your vehicle. Collision coverage also doesn’t pay for the diminished value of your vehicle after repairs have been completed. UMPD coverage may cover the diminished value and often offers a lower deductible than collision. It may also pay for a rental while you wait on your vehicle to be repaired.

Do I Need Uninsured Motorist Coverage?

A better question to ask yourself might be whether or not you can afford not to carry uninsured motorist coverage. If you’re involved in an accident with an uninsured motorist, all of the expenses will be your responsibility. While you may take the other driver to court to try to recover your losses, ultimately, it’s a gamble.

The uninsured motorist may not have had insurance because they don’t have the finances to afford it, therefore also not having the finances to foot the bill after an accident. Even if you win a settlement in court, it may take years to receive compensation. How much of a financial burden would it be to you and your family to have to cover tens of thousands, or even hundreds of thousands, of dollars in property damage, medical bills, lost wages, and pain and suffering? If it’s more than you’re willing to shoulder, then consider adding uninsured motorist coverage to your current policy.

Does Illinois Require Uninsured Motorist Coverage?

Yes. The state of Illinois requires drivers to carry uninsured motorist coverage on their automobile insurance policy with a minimum limit of $20,000 per person and $40,000 per accident. Twenty states currently require some form of uninsured motorist coverage with minimum limits, while 11 also require underinsured motorist coverage to be added.

Illinois drivers must also carry a minimum of $25,000 per person for injury or death, $50,000 per accident for injury or death, and $20,000 for property damage as minimum liability insurance coverage. If you would like a free quote on insurance rates for automobiles in Illinois, reach out to the knowledgeable team at American Auto Insurance. We’d be happy to discuss your situation and provide recommendations on coverage.