Insurance 101: Uninsured (UM) and Underinsured (UIM) Motorist Coverage

Posted August 9, 2016 Insurance 101

In our post regarding liability coverage, we examined the importance of ensuring that the liability limits stated within your auto insurance policy are enough to protect you in case of an accident or loss.

What happens, however, if you are the victim as a result of an accident or loss? What if the at-fault driver has little or no liability coverage in his/her auto policy, or drives away after the accident? How can you ensure medical costs for injuries sustained by you or a family member are covered after an accident?

To help answer these questions, we are here for you to explain important coverages you can add to your current policy.

Uninsured (UM) and Underinsured Motorist Coverage (UIM)

Uninsured (UM) and Underinsured Motorist Coverage (UIM) is an optional (although strongly recommended) coverage that will reimburse your medical costs if you are involved in an accident with an uninsured, hit-and-run, or underinsured driver.

Uninsured Motorist coverage applies if a driver or passenger is injured and the at-fault driver has no liability coverage to pay for the loss.

Underinsured motorist coverage applies if a driver or passenger is injured and the at-fault driver has too little liability coverage to pay for the loss.

In Pennsylvania, you can purchase up to your bodily injury limits for both uninsured and underinsured motorist coverage. If there is more than one vehicle listed on your policy however, you also have the ability to stack this coverage. What does stacking mean? Let’s look at some examples.

Example 1: You currently have one vehicle listed on your auto policy. The declarations page in your insurance policy states:

$250,000/$500,000/$100,000

Using the bodily injury limits from this example ($250,000 per person, $500,000 per accident) you would be allowed to purchase the same values of these limits for uninsured and underinsured motorist coverage.

Example 2: You currently have three vehicles listed on your auto policy. The declarations page in your insurance policy states the same limits provided in Example 1.

Because there are three vehicles listed on your policy, however, for uninsured and underinsured motorist coverage, you would be allowed to purchase (stack) $750,000 per person and $1,500,000 per accident (3 vehicles x $250,000, 3 vehicles x $500,000).

Has your current agent explained the importance of uninsured and underinsured motorist coverage to you? If you have more than one vehicle on your auto policy, have you stacked your limits for uninsured and underinsured motorist coverage? Are you fully prepared in the event of an accident with an uninsured, hit-and-run, or underinsured driver?

If you answered “No” to any of these questions, it may be time to speak with an expert who is here for you. Contact our Experts by calling (412) 281-1842.