What is UM/UIM Coverage?

What is UM/UIM Coverage?

What is UM/UIM Coverage?

Uninsured (UM) motorist and underinsured (UIM) motorist coverage is an additional amount of auto insurance available for you to purchase on your own automobile policy to protect you in case of an accident where the at-fault-driver does not have enough coverage to pay your expenses. Some state laws only require the drivers have minimum liability coverage. So, you may wonder why you need such coverage? With the help of the Law Offices of Nick Del Pizzo, a Baltimore law firm, we will inspect today.

Why you need UM/UIM Coverage

This is where purchasing UM/UIM coverage is very important. Let’s look at a quick example. Let’s say your friend Bob was T-boned at an intersection when another driver ran a red light. Unfortunately for Bob, the driver only had the minimum insurance limits, but Bob was seriously injured. After a lengthy hospital stay with a concussion, several broken bones, and physical therapy, the driver’s $25,000 policy will not come close to covering Bob’s medical expenses, so he will be left to pay the rest out of his own pocket. If his total bill comes to $100,000, that could leave him to pay a staggering $75,000. It’s a scary example, and remember, Bob was not at fault for any of his injuries.

Types of Coverage Available

Now that you see why purchasing this additional insurance could be so vital, let’s discuss the coverage from which you can choose.

  • Stacked auto insurance increases your uninsured motorist (UM) and underinsured motorist coverage (UIM) depending on the number of vehicles you own.
  • Unstacked insurance means that your UM and UIM coverage limits for multiple vehicles are not combined. Premiums for unstacked insurance may be lower than premiums for stacked coverage. That’s because stacking coverage increases the overall limit, or the amount that your insurer might have to pay toward a covered claim.
  • Reduced-by coverage pays you the difference between what the at-fault driver’s insurance policy pays and your insurance coverage. For example, if you have $100,000 in underinsured coverage and the other driver has $25,000, you will have $75,000 available under your own policy.
  • Add-on insurance coverage will pay you on top of the amount the at-fault driver’s company pays. This is the best choice for UM/UIM coverage. This means that in the example listed above, you might have $125,000 available to you rather than $75,000. You are required to decline this type of coverage in writing if you went with the cheaper reduced-by coverage option.
  • Medical Payments coverage is another option. Besides the standard limits on your insurance policy, you can also opt for additional medical payments coverage if your lower limits do not suffice.



About The Law Offices of Nick Del Pizzo

At the Law Offices of Nick Del Pizzo, we make ourselves available for our clients in a variety of case types. Ranging from foreclosure, bankruptcy, personal injury or medical malpractice. Whatever your legal need is, we are there for you, seven days a week. Your case becomes our cause, and we will seek the best resolution possible. 

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