Let’s face it. Auto insurance is confusing.
- There are many levels of insurance options to choose from.
- There are minimum requirements that vary by state.
- And there are many optional policies that may or may not benefit you. These options depend on your needs, disposable income, and other important factors.
In this article, we will go over one important type of auto insurance called UM and UIM coverage.
UM and UIM Coverage Explained
UM and UIM coverage is a type of auto insurance coverage. Sometimes, the two types are offered as separate policies. Other times, they are combined into one policy.
This type of coverage protects drivers like you from drivers who are uninsured or underinsured.
What Does It Mean to Be “Uninsured”?
As a Waukesha resident, you know that you are required to have certain types of insurance. This is based on Wisconsin state law. Other states have other requirements.
If you are “uninsured,” this means you do not have any of the three types of required insurance listed below.
In Wisconsin, all drivers must have these three types of insurance:
- Personal injury liability insurance
- Property damage liability insurance
- Uninsured motorist insurance
Each of these types of insurance coverage comes with its own minimum policy limit requirement as well. All of them will generally be rolled into one policy.
- Personal injury property damage liability coverage covers other drivers.
- Uninsured motorist coverage covers you.
They are essentially opposites of each other. This is important to note. Many drivers think that uninsured motorist coverage protects the other driver. This is a mistake.
How Are Some Drivers Able to Drive Without Insurance?
The truth is these drivers shouldn’t be on the road. If they are caught without insurance:
- Their cars may be impounded.
- Their license may be taken away.
- They may have to pay large fines.
It is illegal not to have the required auto insurance coverage when driving in any state.
What Does It Mean to Be “Underinsured”?
It is not technically illegal to drive while underinsured. It is simply not preferable — especially for other motorists who may get into accidents with these drivers.
An underinsured driver is a driver who only has the minimum required amount of state-mandated auto insurance.
What Does Uninsured and Underinsured Motorist Coverage Do?
Uninsured motorist coverage is often abbreviated as UM coverage. Underinsured motorist coverage is often abbreviated as UIM coverage.
Both of these types of coverage protect you if you get into an accident with an uninsured or underinsured driver. Naturally, their insurance or lack of insurance won’t be able to pay if you’re injured.
It is important to remember that these types of coverage only cover personal injuries. If your vehicle is damaged in the accident, this is a different problem.
How Can You Get Property Damages Paid for by Uninsured Drivers?
This sometimes requires another type of coverage offered in some states. This coverage is called UMPD or uninsured motorist property damage coverage.
UMPD coverage is not offered in Wisconsin.
In Wisconsin, if an uninsured driver damages your vehicle, you’ll need collision coverage. If your insurance company pays these damages through collision coverage, they may also sue the uninsured driver. The charges will be for the expenses your insurer pays on your behalf.
If you do not have collision coverage, you may sue the driver. Sometimes, they will be able to pay. Other times, their assets will be taken. Their wages may also be garnished.
Couri Insurance Agency can answer any questions you have related to UM and UIM coverage. Talk to our agents today by stopping into our office or giving us a call.