In most states, New Jersey included, all insurance policies have “uninsured motorist protection”, and most have “underinsured motorist protection”. What does this mean?

Uninsured motorist protection is mandatory in the State. That is, your insurance carrier/agent must include it in your coverage. You can (and should) have coverage limits which match your own liability insurance coverage limits. This coverage protects you in the event that you are involved in an accident which is caused by a driver who has no liability insurance on his car. By some estimates, nearly 2 in 10 cars on the road are uninsured. If you are in an accident, that means you have a nearly 1 in 5 chance that the other vehicle was uninsured. Uninsured motorist (UM) coverage is therefore critical for your protection.

What does it cover? While UM coverage does not pay your medical bills (your personal injury protection coverage or PIP does that), it does provide very important coverage for any serious injury you may suffer. For example, UM coverage will compensate you for the pain and suffering you go through, any permanent injury you may suffer, the impact such injuries may have on the quality of your life, or your enjoyment of life, etc. In terms of dollars, these are often the largest elements of a claim arising out of a car accident. That is, a person may be injured in an auto accident, and have $10,000 in medical bills. However, the compensation he or she is entitled to for pain and suffering, permanent injuries and the like may be many times that. If the accident was caused by an uninsured motorist, and he did not have UM coverage, he would receive nothing.

Underinsured motorist protection (UIM) is very important too. Why? Even when the other car does carry liability insurance coverage, the limits of coverage are often very low and would provide you with minimum protection if you are seriously injured. For example, in New Jersey, the minimum liability limits are $15,000 per person/$30,000 per accident. If you were involved in an accident which was caused by someone insured like that, and you were seriously injured, the most you could possibly recover from that person is $15,000, unless you had UIM coverage yourself.

Let’s take the following example. You are involved in an accident in which you suffer serious injuries that would entitle you to compensation of $100,000. The other driver who caused the accident had only $15,000 in coverage on his car. You were smart enough to purchase ample UIM coverage on your car. You would be compensated: $15,000 from the other driver’s policy, and $85,000 from your own UIM coverage.

Uninsured motorist coverage, and underinsured motorist coverage are usually stated together on your “Declarations Page” of your insurance policy. The declarations page is the page that outlines the different coverages you have purchased, and the amounts. It will say, for example that you have “uninsured motorist/underinsured motorist” coverage of $100,000 per person/$300,000 per claim.

UM/UIM coverage is a bargain. The premiums charged for such coverage are very cheap, so you should purchase the maximum amount you can purchase up to the liability limits you carry on your automobile insurance policy. And if you make a claim against the UM/UIM coverage, your premiums will not go up.

If you have questions about UM/UIM coverage, you may contact us by phone at (800) 974-9922, or at JHoytEsq@aol.com