What is underinsured/uninsured motorist coverage and why do you need it? Many people know of, or at least heard of, underinsured / uninsured motorist coverage, but do not have such coverage. This is automobile insurance commonly referred to as UM. This is insurance coverage that is available to you in the event that you are hit by someone with little or no insurance.
When purchasing automobile insurance, most people are only interested in how much premium they will have to pay. They think that having insurance makes them “fully covered”. This is far from the truth. There are a number of additional coverage and amounts that you can request from your insurance agent. Coverage like PIP (Personal Injury Protection), bodily injury, UM and med-pay are all types of additional coverage but you need to ask for it. You need to consider additional coverage because accidents involving injury involve more than just paying the doctor. What if you are injured in an accident seriously enough to be hospitalized? Clearly this is an expensive proposition, but you have to consider other things like missing work; therapy after you get out; and any other injury related expenses.
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The State of Florida only requires Florida driver’s to carry Personal Injury Protection insurance, otherwise known as PIP. Florida is a “no fault” state meaning PIP covers your medical expenses and lost wages up to $10,000 regardless of whose fault the accident may be. This $10,000 coverage may be limited based on the treatment you receive but that is for another article entirely. Unfortunately, some accidents cause injuries that cost more than $10,000 to treat. So what do you do in that case? The obvious thing is to look at the person who caused the accident to see their insurance coverage. Hopefully, that person is insured well enough to cover your remaining treatment and damages. But what if they have little or no insurance? The odds of that happening in Florida are greater than you may think. The Insurance Research Institute noted that in 2011 the percentage of uninsured drivers in Florida was 24%. That 1 in every 4 drivers in Florida are driving without insurance. Not only are there so many drivers in Florida without insurance but many do not have enough coverage if you should be seriously hurt. So who pays your bills if you happen to be hit but one of the uninsured drivers?
The best answer should be your auto insurance company. Because Florida doesn’t require driver to carry bodily injury coverage, you need to look out for yourself. You have the option of purchasing the UM coverage. Many people elect not to purchase this coverage just to save a few dollars in the premium. Check with your agent or carrier to see how much this additional coverage will cost. The premium will depend on how much coverage you want and whether that coverage is “stacked” or “non-stacked”. In the event that UM coverage comes into play, you need to see if the coverage is stacked or non-stacked. For example, if you have 25/50 coverage ($25,000 per person/$50,000 per accident) then the UM is likely $25,000 unless you opted for a different amount. Again, different, then it must be in writing and signed by the covered person. Additionally, let’s say you own three (3) vehicles. If the UM coverage is stacked, then there is 3 (the number of vehicles covered) times the UM coverage, or, $75,000.
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If you are in an accident and are told that you did not get UM coverage, you need to ask to see a copy of the UM rejection form. Florida law requires that an insurance company offer you UM and that you specifically reject it by signing a standard form. This rejection may now be signed electronically. But you need to be sure to check this rejection form for any inconsistencies or errors if you don’t agree with the coverage based on what you thought you had.
Given the fact that there are so many uninsured drivers in Florida, and even more underinsured drivers, you need to protect yourself with the additional coverage even though it may cost you a little more. It’s better to have UM Insurance coverage and not need it than need it and not have it.
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