If you buy or lease a car, youâll need to arrange for insurance coverage. Not only is it the law in most states, it will also protect your bank account in the event of an accident. However, if youâre involved in an accident and the other driver doesnât have car insurance, you could run into problems. Thatâs the thinking behind uninsured motorist insurance.
Compare checking accounts here.
Uninsured Motorist Insurance Basics
If two people who both have car insurance get in a car crash, they exchange insurance information. The other driverâs insurance company generally pays your expenses if youâre in a crash. So what happens if the other driver doesnât have insurance? Thereâs no one to pay you, cover your car repair or replacement or foot your medical bills if youâre injured. Your own car insurance may cover those costs, but it depends on the plan.
Thatâs where uninsured motorist insurance comes in. Uninsured motorist insurance policies offer protection against property damage or personal injury resulting from a run-in with an uninsured driver. There are a lot of bad drivers out there, and plenty of people who drive regularly but canât afford car insurance. Have a run-in with one of them and you could end up covering your own medical and car repair bills.
In 22 states and the District of Columbia, drivers are required to have uninsured motorist insurance, so if you have vehicle insurance youâre covered in the event of a crash with an uninsured driver. But if you live in a state that doesnât require uninsured motorist coverage, your regular car insurance policy may not protect you from bills if youâre in a crash with a driver who doesnât have car insurance.
Check out our budget calculator.
Is Uninsured Motorist Insurance Necessary?
If you live in a state that requires uninsured motorist coverage as part of the minimum coverage requirement for all auto insurance policies, you have at least some protection from uninsured drivers. You can always call your insurance company to check on the kind of coverage you have and discuss your coverage options.
If you live in a state that doesnât require uninsured motorist coverage, the question becomes: Should you buy uninsured motorist insurance as an add-on policy to your regular car insurance? Before you decide, itâs worth pricing it out.
First, you can call your car insurance provider and check what level of coverage you already have against uninsured motorists. Your existing plan may provide some level of protection against medical bills and/or car repair bills resulting from a crash with an uninsured motorist.
If you donât have any coverage or if you think your coverage levels are insufficient, you can ask your insurance provider how much it would cost you to add uninsured motorist insurance to your coverage package. You can also get quotes from other car insurance companies and opt for the policy that provides the best coverage for the lowest price.
Uninsured motorist insurance can give you some extra protections, too, such as coverage in the event that a hit-and-run driver crashes into your car or in the event that youâre struck by a vehicle as a pedestrian. So even those with built-in protection against uninsured motorists through their regular car insurance may be tempted to add extra coverage.
Related Article: All About Car Loan Amortization
Just because you have car insurance that youâre paying for every month doesnât mean youâre protected in all eventualities. If reading this article has made you nervous that you might not have enough â or any â protection against uninsured motorists, this could be a good time to get your insurance company on the phone, particularly if you live in a state with a high percentage of uninsured drivers.
Photo credit: Â©iStock.com/bowdenimages, Â©iStock.com/bowdenimages, Â©iStock.com/vm
The post What Is Uninsured Motorist Insurance? appeared first on SmartAsset Blog.