Yes, you need uninsured motorist coverage if you have health insurance and you live in one of the 22 states where uninsured motorist insurance is required. Even if uninsured motorist coverage is optional in your state, buying it is smart if your health insurance plan is limited or requires high out-of-pocket expenses.
Uninsured motorist insurance comes in two forms: uninsured motorist property damage (UMPD) and uninsured motorist bodily injury (UMBI). Uninsured motorist property damage coverage will pay to repair or replace your car after an accident caused by an uninsured motorist. On the other hand, uninsured motorist bodily injury coverage pays for medical bills, lost wages, and funeral expenses due to a similar accident. Some policies even compensate for pain and suffering.
Uninsured motorist bodily injury coverage can overlap with health insurance, though it generally involves fewer direct costs for the policyholder. For example, unlike UMBI, health insurance may require co-pays, co-insurance, and a deductible. Additionally, health insurance policies are often limited to a certain network of providers, while UMBI will pay for care from a wider variety of sources.
Uninsured Motorist Bodily Injury Might Be Worth It If:
- You get your health insurance through an employer you plan on leaving soon or another unreliable source.
- Your health insurance would leave you paying out-of-pocket for thousands of dollars in bills if you are hospitalized or left with a long-term condition.
- Your family members and passengers do not have good health insurance policies, since UMBI also covers the policyholder’s passengers and family members.
- You can stack your UMBI policies. This involves combining the coverage on multiple vehicles or policies in order to get higher limits if you are seriously injured.
Uninsured motorist coverage is an inexpensive policy option that usually only adds about 5% to your annual car insurance premium. On the other hand, the average UMBI claim payment was $32,227 in 2016, the most recent year with data. This is a hefty sum that you would have to pay partially out-of-pocket if you only had health insurance.
In other words, buying UMBI, even if your state doesn’t require it, can protect you from the financial consequences of serious injuries caused by an uninsured driver.
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