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Car Insurance

JUN 22, 2022

Worried about underinsured drivers on the road? Add uninsured motorist coverage



8 min read

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While most U.S. states require drivers to have a minimum form of car insurance, around one in eight drivers are uninsured. And if you’re involved in a serious accident or crash with an uninsured or even an underinsured driver, you could end up with some sizable costs left uncovered that you may have to pay out of pocket. Here’s how you can protect yourself from uninsured drivers.

As a driver, it is your responsibility to be courteous and respectful of others on the road, and having the right car insurance coverage is one way to do so. However, according to the Insurance Information Institute one in eight drivers in the US are uninsured. 

If you have an accident with an uninsured driver, you can be left to face the repair and medical costs of the crash on your own. A driver can also be underinsured, meaning they only have a minimum policy, which could still leave you without the full coverage needed to cover losses from an accident. Therefore, being a well-insured driver can help minimize both parties' costs in the event of an accident.

While there is no way to guarantee you will be fortunate enough to not cross paths with an uninsured or underinsured driver, there are steps you can take to protect yourself if you do. Here’s our guide to keeping yourself covered on the roads.

What is an uninsured driver?

An uninsured driver is someone who does not have any type of car insurance policy for their vehicle. Meaning if they are at fault for causing an accident, the other driver’s insurance will have to be used to pay for any associated costs. And before you ask, “is that even legal?” The answer is no, in most states it is not legal. Every driver is required to have a minimum level of insurance coverage to legally drive in every state besides New Hampshire

There is not one primary reason as to why someone would risk driving without car insurance. An uninsured driver could be someone who simply cannot afford a car insurance policy or someone who is trying to save money by cutting expenses. They could also be someone who is borrowing a friends’ car, thus not the policyholder. Or it could be someone that should not be legally driving due to a revoked or suspended license.

From the above examples, we can see that people who choose to drive without insurance on their vehicle typically have a negligent reason for doing so. And while it is rare to encounter uninsured drivers, it can be both dangerous and costly for any well-insured driver if you do.

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What is an underinsured driver?

Underinsured drivers are another type of driver that well-insured drivers should be wary of. While the law forbids drivers from being entirely uninsured in most states, some state laws only mandate you have a limited amount of coverage for your vehicle. Thus, an underinsured driver means they have the legal minimum in insurance coverage.

For instance, in Florida the law only requires drivers to have a very small amount of coverage —$10,000 property damage liability and $10,000 personal injury protection. You may think $10,000 goes a long way until you start looking at how much vehicles actually cost and their replacement values. For example, Kelly Blue Book highlighted the average cost of a new car was $47,000 in the fall of 2021. If someone were to hit you holding minimum coverage, their policy would potentially only cover around a fifth of the vehicle cost. So, if you were to be in a collision with a Floridian policy holder with minimum coverage and totaled your car, you could end up with the majority of this sizable bill.

For all intents and purposes, being underinsured can be nearly as damaging as being completely uninsured because this type of policy may be unlikely to cover the costs incurred in the event of an accident. Particularly for drivers that regularly travel between states, the state law-mandated varying levels of protection can be a concern.

This is because you may travel across states which do not have mandated coverage amounts. If another driver without adequate coverage crashes into your car in one of these low-coverage states, you may find their insurance does not cover a portion of the accident expense. Having underinsured coverage can help protect you from these situations.

Why should you care about these drivers?

Driving comes with both responsibility and risk. While simply having an adequate car insurance policy is a sign that you’re a responsible driver, keep in mind some irresponsible drivers negligently drive without proper coverage. All it takes is for one of these poorly insured drivers hitting you on the road and you could quickly come up against steep bills.

If you travel between states, you must prepare yourself for the challenges of varying levels of protection so that you are fully protected at all times. Because state laws can vary when it comes to minimum coverage amounts, it can be hard to tell if you have enough coverage for the state you are traveling through. You can take out the guesswork by adding uninsured motorist insurance coverage to your auto insurance policy. This can help to cover accident costs no matter where you find yourself within the United States.

Whether you’re dependent on having your own transportation or earn your living with your vehicle, having an accident with an uninsured or underinsured driver can cause serious financial and emotional distress. Fortunately, there are some simple and affordable steps you can take to protect yourself from underinsured and uninsured drivers.

Uninsured motorist insurance coverage

Uninsured motorist coverage helps protect you from uninsured and underinsured drivers on the road. This coverage can cover the expenses and medical bills of both you and your passengers if you’re in a crash.

Uninsured motorist coverage is an additional form of insurance that drivers can purchase when signing a new car insurance policy. This add-on offers extra protection if you’re involved in an accident with an uninsured driver. As a general rule, this kind of insurance can help you get back on your feet by helping to cover costs like car repairs and medical bills from the accident. In some cases, it can also compensate you for lost wages if your livelihood is dependent on your vehicle. 

If you’ve had an accident with a driver whose insurance is not enough to cover the costs of the damage, this uninsured policy kicks in. You need to file the initial claim with your insurance provider which in turn seeks subrogation from the driver’s insurance provider. If the claim is successful, your provider can cover the remaining costs. So if you need $10,000 to repair your car, and the total insurance payout only covers half of that, your underinsured policy can help you recoup the remaining $5,000 from the other provider.

The payout amount is subject to the uninsured motorist coverage limits based on your property damage or bodily injury policy. Oftentimes, uninsured motorists property damage is covered by a deductible on a per-accident basis like $200 with the insurance company covering the rest of the repair costs. You can find the exact details of your policy by reading the terms and/or contacting your insurance provider.

Both uninsured and underinsured coverage is relatively inexpensive and can easily be included as part of your broader insurance policy. As a driver, look for the following options to add as underinsured/uninsured coverage to your policy on top of your existing comprehensive and liability coverage. The options listed below will help to provide more comprehensive protection for your vehicle.

When you get an insurance quote through Caribou, check to see if Underinsured and Uninsured Motorist coverage is included. It should be displayed as a line item on the policy along with the coverage amount like $100,000 per person and $300,000 per accident.

Uninsured motorists property damage (UMPD), regardless of whether or not a driver is underinsured or uninsured, helps you get back any costs incurred to fix your car. This coverage can pick up any leftover costs that the other driver’s insurance doesn’t cover, and any further damage to your home or property. In some states, UMPD can also be used if your vehicle is hit by a hit-and-run driver.

You could also choose uninsured motorists bodily injury (UMBI), which will give you comprehensive coverage if you incur any personal injuries. The uninsured motorists bodily injury policy usually has a limit like $100,000 and $300,000 on a per person and per accident basis — see your policy details for specifics. This policy pays for medical bills, lost wages if you can’t work, or funeral expenses. It can also apply if you’re hit by a car as a pedestrian or while riding your bike.  While the two policies offer slightly different levels of coverage, they can both provide peace of mind to drivers looking for extra protection.

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Protecting yourself on the road

While there is no guarantee that the drivers involved in an accident will have the adequate level of insurance coverage, taking the right steps today can help minimize future costs. You could choose to take out uninsured motorist coverage, which helps recoup costs if you have an accident with a non-insured driver, or underinsured coverage, which helps you recoup any costs after the other vehicle’s insurance policy pays out. For drivers looking for more coverage, property and bodily damage insurance can be a more targeted way of protecting drivers and their passenger’s property and wellbeing, to give you true peace of mind.

The best way to protect yourself while driving is to make sure that you have the most comprehensive coverage possible. At Caribou, we can save you time and money when it comes to finding the insurance policy that suits your needs. Learn more about car insurance through Caribou.

Uninsured motorist FAQs

  • What is an uninsured driver? An uninsured driver is someone who does not have any type of car insurance policy for their vehicle. Meaning if they are at fault for causing an accident, there is no insurance to pay a claim.

  • What is an underinsured driver? An underinsured driver means they have a limited amount of coverage for their vehicle but not enough to pay for the full cost of the accident. For example, a limited amount of coverage may include $10,000 property damage liability and $10,000 personal injury protection which would not be enough to fix a totaled car.

  • What does uninsured motorist insurance coverage do? This coverage helps cover the cost of accidents after the other party’s car insurance runs out. It can cover the gap between their limits and your total expenses.

  • How can I claim this coverage after an accident? You need to file the initial claim with your insurance provider which in turn seeks subrogation from the other party.

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