Merits and Demerits of Uninsured Motorist Coverage

September 15, 2023 by Greg Baumgartner

Imagine you are cruising down the Texas highways, enjoying the open road, when suddenly, you are involved in a car accident. It was not your fault, and the at-fault driver does not have insurance. What do you do in such a situation? This is where Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage come into play, offering you a safety net when the unexpected happens.

In this article, you learn the ins and outs of UM/UIM insurance, Texas’s mandatory auto insurance laws, the advantages of having this coverage, and why it might be a wise investment.

Mandatory Auto Insurance Under Texas Law

Texas law mandates specific minimum auto liability insurance coverage for all drivers with vehicles registered in the state. These minimum requirements include:

• $30,000 in bodily injury liability coverage per person.
• $60,000 in bodily injury liability coverage per accident.
• $25,000 in property damage liability insurance.

Interestingly, UM insurance is optional, not mandatory, in Texas. Despite this, it can seem almost obligatory. When obtaining mandatory liability insurance in Texas, state law obliges insurance companies to offer a minimum of $30,000 in UM/UIM insurance.

If drivers do not respond to this offer, their policy will automatically include UM/UIM coverage. The only way to decline this coverage is to submit a written rejection to the insurance company.

The Merits of UM/UIM Insurance

You are Covered Whether or Not the At-Fault Driver Has Effective Liability Insurance

In Texas, approximately 8% of drivers are uninsured. This includes uninsured drivers for various reasons, such as those who deliberately cause accidents in “road rage” incidents or individuals driving vehicles without the owner’s permission. UM insurance steps in to provide coverage in such situations. It extends its protective umbrella to you, your family members, passengers, and anyone driving your car with your permission.

You Can Purchase UM/UIM Insurance for Property Damage

UM/UIM policies do not just stop at bodily injury coverage; they can also protect against property damage. This becomes particularly crucial if you own an expensive car. Texas’s minimum property damage liability insurance of $25,000 may fall short of compensating for all damages. UM/UIM coverage bridges this gap, ensuring you’re not left with hefty repair bills.

UIM Insurance Protects You When the At-Fault Driver’s Insurance Is Insufficient

There is a distinction between UM and UIM coverage:

• UM insurance comes into play when you’re involved in an accident without insurance resources. This could be because the at-fault driver lacks insurance, is excluded under the car’s policy, or is untraceable.
• On the other hand, UIM insurance safeguards you when the at-fault driver’s insurance coverage is insufficient to cover all your damages.

Both types essentially serve to protect you from similar scenarios. For instance, if the at-fault driver has only the minimum liability insurance, which may not be enough to cover your injuries if they exceed $30,000, UIM coverage can supplement your resources.

UM Protects You in Hit-and-Run Accidents

Hit-and-run accidents can be particularly frustrating. It does not matter whether the at-fault driver carries liability insurance; if they flee the scene and remain untraceable, UM insurance treats this situation like an accident involving an uninsured driver.

UM/UIM Insurance Offers Full Personal Injury Damages

Both UM and UIM provide compensation comparable to what you would receive in a personal injury lawsuit, subject to policy limits. This compensation encompasses a wide range of expenses and losses, such as:

• Past, present, and future medical expenses.
• Lost earnings.
• Diminished earning capacity.
• Out-of-pocket expenses.
• Pain and suffering.
• Emotional distress.
• Loss of enjoyment of life.

You can also seek compensation for any other tangible or intangible loss directly resulting from your accident with the help of a Houston accident attorney.

The Demerits of UM/UIM Insurance

While UM/UIM insurance offers numerous advantages, it is not without its drawbacks:

• UM/UIM insurance does come at a cost.
• UM/UIM property damage insurance applies a deductible.
• An “actual contact” rule applies to coverage of hit-and-run accidents. If an at-fault driver causes you to swerve into a tree and then disappears, you cannot use your UM insurance for compensation.

While UM/UIM insurance may have costs and limitations, its merits in providing peace of mind and financial protection in uncertain situations make it a prudent choice for Texas drivers. Consider your needs, budget, and risk tolerance, and make an informed decision about including UM/UIM coverage in your auto insurance policy. Remember, accidents can happen when you least expect them, and having the right coverage can make all the difference.