FAQs on Uninsured Motorist Coverage

What is Uninsured Motorist coverage or clause?

Uninsured motorist coverage or clause is a term in a car insurance policy which gives right to a policy holder to receive damages from the uninsured and negligent driver who caused the accident. 

The insurance company will pay the remaining amount left of the damages that the uninsured driver cannot pay. UM coverage usually pays for the injured person’s medical bills, lost wages, pain and suffering, and loss of earning capacity.

Who is covered by UM?

The covered individual depends on what the definition of “insured” is on the policy. Usually, there are three classes of people that UM coverage protects:

• Class 1 – The insurance holder himself and the family members.
• Class 2 – Other authorized car occupants.
• Class 3 – People related to the insured that were also injured on the accident with the uninsured driver.

The people who fall on each class may also depend on state laws.

Is UM required?

In states like Illinois, Maryland, and New York, the purchase of UM is mandatory; in most states however, it is not. The limit for UM payments must conform to the state minimum, but it should not exceed the insured person’s liability limits. A policy holder should not try to settle payment with the uninsured driver, unless he prefers not to file a claim for UM protection.

Who are uninsured motorists?

Like the people protected by UM, there are also three categories for motorists who are considered uninsured:

1. People who are protected by liability coverage for the vehicle they are driving.
2. Hit and run drivers are considered uninsured under its provisions since they left the scene of the accident without providing information about themselves to the other party involved. However, if someone can identify them through a license plate, the insurance company may see this as sufficient information, which can lead to denial of UM claim.
3. The third category, which only applies in some states, is called an underinsured motorist. An underinsured driver has liability coverage for his vehicle, but its dollar amount is less than the dollar amount of the victim's UM coverage.

Does UM insurance only apply when the other driver has no insurance?

UM insurance can also be used in other situations; most common is when an insured person drives out of his state, and into another state that has lower limits for UM payments. If the insured driver meets an accident on that state, the law will try to force the policy from the state the driver is from to meet the minimum limit of the state where the accident happened.



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