Protecting Yourself against Uninsured Drivers

While many drivers practice safe driving habits, the fear of getting into an accident with someone who is uninsured or underinsured is a real concern.

According to the Insurance Information Institute (I.I.I.), one out of every seven drivers in the U.S. is thought to have no auto insurance, leading to broad repercussions for the 86 percent who are covered.

Jeanne Salvatore, senior vice president and consumer spokesperson for the I.I.I., notes, ""Most people don't think about the uninsured or underinsured motorist coverage portion of their auto insurance policy until they are the victim of a hit and run accident, or are involved in a crash with a driver who either does not have auto insurance or has very minimal insurance.'

Uninsured motorist (UM) coverage will reimburse you, a member of your family, or a designated driver for bodily injuries that result from a collision with a hit-and-run driver or an uninsured motorist.

Underinsured motorist (UIM), coverage takes effect when an at-fault driver has insufficient coverage to pay for your entire loss. UIM coverage will also protect you should you be struck by a car as a pedestrian.

According to a 2009 study from the Insurance Research Council (IRC), it is estimated that 14 percent of drivers nationwide were uninsured in 2007.

States sporting the largest percentage of uninsured motorists were New Mexico (29 percent), Mississippi (28 percent) and Alabama (24 percent). States exhibiting the lowest percentage of uninsured drivers in 2007 were Massachusetts (1 percent), Maine (4 percent) and New York and North Dakota (5 percent each).

Despite the fact auto insurance policies with both UM and UIM coverage are available in all 50 states, these are optional coverages in most states.

Carrying UM coverage is required by law in the District of Columbia and the following states: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Virginia and West Virginia. The price of uninsured motorist coverage differs considerably from state to state, depending in part on the percentage of motorists who are uninsured.

Only five of the states that require their drivers carry UM coverage also mandate buying UIM coverage; they are: Connecticut, Maine, Minnesota, North Carolina and Vermont.

Additional Driver Protections Available

No-fault insurance laws, which are mandated in a dozen states and Puerto Rico, offer some relief from uninsured motorists since accident victims oftentimes can receive benefits from their own insurers, regardless of whether or not the other party has coverage.

Even if you reside in a no-fault state, UM/UIM coverage proves a cost-effective purchase since the policy provision provides an added layer of financial protection.

Also important to remember is that if you are involved in an accident due to an uninsured motorist and you do not have UM coverage, your health insurance policy oftentimes will pay medical bills related to that car accident.

It is important to note, however, that your health insurance policy will not cover lost wages for missed work, nor will a health insurer seek redress for pain and suffering that resulted from the accident. Lost wages along with pain and suffering are reimbursed by the liability portion of the at-fault driver's auto insurance policy. Do note, though, that if the at-fault driver has no or minimal coverage, the victim's UM or UIM policy provisions are accessed.

All states (except New Hampshire and Wisconsin), require their licensed drivers to buy an auto insurance policy. Wisconsin recently enacted a law that will require the purchase of an auto insurance policy in June 2010.