What is uninsured motorist coverage and do you really need it?

Written by Ryan Lowell on November 7, 2011 & Posted in Insurance

An auto insurance expert fields a question from a consumer who wants to know if he should reject uninsured motorist bodily injury coverage or if it is necessary as part of his car insurance policy.

Unsure if uninsured motorist bodily injury coverage is for you? Find out what it covers.

I read that I can reject uninsured motorist coverage if I sign a form. Is uninsured motorist coverage really necessary? Is it OK to decline the coverage if I have good health insurance?

Thanks for your input,

Bob S., St. Petersburg, Fla.

Hi Bob,

As I'm sure you know, insurance companies tell you to buy as much coverage as you can afford, but there are some areas where you can cut back if you already have coverage elsewhere. Depending upon your specific situation, uninsured motorist bodily injury may be one of the coverages you can drop to save money on your car insurance.

First off, let's clarify that you're asking about uninsured motorist bodily injury (also called UM or UMBI). UMBI deals with personal injuries you sustain in a car accident. It is different from uninsured motorist property damage (UMPD), which deals with damages to your car.

Uninsured motorist bodily injury can only be used if you're injured in an auto accident where the at-fault driver is without auto insurance. In most states, it also extends to injuries suffered in a hit-and-run accident. It covers you, members of your household and passengers in your vehicle who were injured.

UMBI coverage pays (up to your limits) for both:

  • Economic damages. The actual medical expenses related to your car accident injuries.
  • Non-economic damages. This includes damages such as pain and suffering.

If you have a good health insurance plan and believe it will cover you as well, or better, than UMBI can, you can decline this coverage since your state allows you to do so in writing.

Before rejecting UMBI, check with your medical insurance provider and make certain there aren't any exclusions or limitations in your plan for injuries sustained in a motor vehicle accident. If this is not an issue, and you feel comfortable that your medical insurance will be sufficient if you are in a serious accident with an uninsured driver, decline the coverage and save yourself some money.

If your health insurance comes with a high deductible, or you find that it doesn't cover car accident injuries, consider keeping uninsured motorist as part of your car insurance policy.

If you are in an accident where the liable party is uninsured, it is unlikely that this individual will have any assets to go after if your medical bills are more than you can afford. In this type of situation, the cost of uninsured motorist coverage would be a savings in comparison to the thousands of dollars you may spend on medical bills.


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