Let’s be honest, if you’re not in the insurance business, you probably do not know what the coverage of uninsured and underinsured drivers is and why it’s important. So let’s start by discussing the three common types of coverage for uninsured and underinsured motorists and conclude with 5 reasons why you should consider having one or all three on your car insurance in Ohio.
What is the liability of uninsured motorists for bodily injury? (also known as UMBI)
This insurance cover provides bodily injury protection for you and the occupants of your car who were injured in an accident caused by another vehicle that has no liability insurance. It is important to note that this is an OPTIONAL coverage in the state of Ohio. It is also important to note that it may match your limit of liability for bodily injury OR be at a lower limit, but can NEVER be higher.
Here̵7;s an example of what car insurance in Ohio would look like:
Liability for personal injury – USD 100,000 per person / USD 300,000 per accident
Uninsured motorists’ liability for bodily injury – USD 100,000 per person / USD 300,000 per accident *
* may be lower – for example, $ 50,000 per person / $ 100,000 per accident.
Here is an example of how UMBI would work in an injury situation:
You are hit by another vehicle. The other driver is guilty. Both you and your passenger are injured. The other vehicle is not insured. In this situation, your car insurance will pay up to the insurance limit for damages to you and your passengers. Let’s say you have $ 100,000 per person and $ 300,000 per accident for UMBI. This means that your insurance will pay up to $ 100,000 for you and up to $ 100,000 for your passenger for bodily injury caused by an uninsured vehicle.
What is the liability of underinsured motorists for bodily injury? (also known as UIMBI)
This is similar to bodily injury for uninsured motorists, EXCEPT that the other vehicle IS insured but does not have enough coverage to pay for the damages.
Here is a UIMBI statement that actually happened to one of our customers:
Our customer (let’s call him George), drove in the country. Another driver (let’s call him Fred), drove a stop sign and T-legged George. The other vehicle was insured under state minimum limits (which at the time of the accident were $ 12,500 per person and $ 25,000 per accident for bodily injury liability – Ohio increased the limits in 2013). George’s medical bills amounted to $ 125,000. The other company paid the insurance of a maximum of USD 12,500 per person and closed the claim (because a maximum is a maximum after all). That left $ 112,500 of medical bills left to pay.
George filed a claim against underinsured motorists during his car insurance to help pay the balance. Let’s say that George had $ 50,000 per person and $ 100,000 per accident for UIMBI. Subtracting $ 50,000 from $ 112,500 leaves a balance of $ 62,500, which would either fall on the health insurance, George or perhaps the other party via a lawsuit.
* Worth mentioning – This makes a good argument for buying a higher liability limit and then coverage for uninsured / underinsured drivers. It protects you from situations like above.
What is the property damage of uninsured motorists? (UMPD)
This covers property damage to your vehicle. So if your car is damaged by an uninsured vehicle (and sometimes an underinsured vehicle) you can use this coverage to get the vehicle fixed. It is purchased at a certain coverage limit ($ 7,500 is the lowest available with higher available limits) and is subject to a deductible, much like comprehensive and / or collision protection.
Next, we’ll talk about 5 reasons why you should consider having one or all three on your Ohio health insurance policy.
Reason 1 why you should have coverage for uninsured / uninsured motorists’ bodily injury
The main reason – because you can not trust that the other vehicle is insured or has AVAILABLE insurance to pay for damages you or your passengers incur. The state of Ohio only requires a limit of $ 25,000 per person and $ 50,000 per accident for bodily injury to be considered “financially responsible.” In the interest of cost savings, many people buy this state minimum limit. Or some choose NOT to have car insurance. You must buy an amount that protects YOU and your passengers. It’s the only thing you have control over.
Reason 2 why you should have coverage for uninsured / uninsured motorists’ bodily injury
After reason 1, if the other vehicle does not have enough liability insurance and you have to sue, it does not necessarily mean that you will get the money. What happens if the vehicle owner has no assets or very few? Nothing to pick up from there. If the vehicle owner is employed, wage garnishment is an option for collection. But what happens if that person is unemployed? Again, nothing to pick up from. If there is nothing available to take, no money will come your way.
Reason 3 why you should have coverage for uninsured / uninsured motorists’ bodily injury
If you do not have health insurance, UMBI / UIMBI gives you a way to help you pay for your injuries related to car accidents. Otherwise you pay out of your own pocket.
Reason 4 why you should have coverage for uninsured / uninsured motorists’ bodily injury
Even if you have health insurance, if you have a higher deductible (let’s say $ 2500 or $ 5000 which seems to be even more common now), you will pay out of your own pocket up to that deductible before the insurance starts paying. It is important to note that many health insurances contain a provision that all damages related to a “car accident” must first be paid for by some other valid and collectible insurance, before they pay. A car insurance really fits that category.
And let’s not forget the coverage for property insurance for uninsured motorists – Cause 5
Although this coverage is not seen as often as personal injury insurance, it still serves a valuable purpose.
As vehicles get older, customers tend to remove the crash protection, which pays to repair your vehicle as a result of an accident. If an accident occurs where your vehicle is hit by a vehicle without car insurance and you do not have collision insurance, you can use UMPD to fix your vehicle. So you’re not quite in this situation.