Do I need uninsured motorist coverage if I have health insurance?

Underinsured motorist coverage is a type of car insurance that applies when the policyholder is in an accident caused by a driver who doesn’t have sufficient liability insurance. If the policyholder’s expenses exceed the at-fault driver’s limits, underinsured motorist covers the remaining bills up to a certain amount.

How Underinsured Motorist Coverage Works... read full answer

Say that you are involved in an accident that leaves you with $35,000 in vehicle damage. Typically, the at-fault driver’s property damage liability insurance would pay to repair your car. But if that driver’s liability insurance policy only covers $30,000 in property damage per accident, underinsured motorist coverage would pick up the rest. This would prevent you from having to either file a lawsuit against the driver or pay the remaining $5,000 yourself.

Underinsured motorist coverage is required in some states along with uninsured motorist insurance, which applies when the at-fault driver doesn’t have any liability insurance at all. But even if it’s not required, underinsured motorist coverage is still optional in most states. To learn more, check out WalletHub’s guide to uninsured/underinsured motorist coverage.

Uninsured motorist bodily injury coverage pays for medical care, loss of income, and funeral expenses after an accident where an uninsured driver is at fault. Uninsured motorist bodily injury insurance covers the policyholder, his or her family members, and passengers. Most policies even pay for an accident sustained when the policyholder is biking, walking, or in another person’s car.... read full answer

In other words, uninsured motorist bodily injury (UMBI) insurance is essentially the reverse of your liability policy. Instead of buying coverage for damage that you cause, UMBI protects you when a driver who does not have liability insurance hits you.

Uninsured Motorist Bodily Injury Limits and Requirements

UMBI coverage limits are usually expressed as two figures, one for the maximum dollar amount of UMBI that your insurer will pay per person and the other for the maximum amount per accident. For example, a policy with UMBI limits of $10,000/$30,000 would have coverage up to $10,000 for one person’s injuries and up to $30,000 total for all injuries caused by one car accident.

UMBI coverage is required in less than half of states, but drivers can buy it in most states even if it is not mandatory. States with mandatory UMBI usually require limits equal to the state’s bodily injury liability coverage limits, since UMBI is meant to be a substitute for the at-fault driver’s liability insurance.

Uninsured Motorist Bodily Injury vs. Other Insurance

As a coverage option, UMBI somewhat overlaps with health insurance, disability insurance, MedPay, and PIP. However, UMBI often has higher limits than MedPay and PIP, and it does not require the copays or deductibles that come with health insurance.

Uninsured motorist bodily injury is also an inexpensive coverage option since it usually costs about 5% of your total annual premium.