Auto insurance is a topic people may find complex and boring. It can be confusing to get a clear picture of what types of insurance you are required to have, which optional coverages are worth your consideration, and what each type of coverage actually includes.
One key type of insurance that people routinely inquire about is uninsured (UM) and underinsured (UIM) motorist coverage. Both UM and UIM, which are optional in Pennsylvania, are extremely important types of coverages that can be a godsend if ever you are involved in wreck with someone who does not carry insurance.
In order to protect yourself and your family if you are ever involved in an accident and ensure your policy meets your particular needs, take a few moments to understand the auto insurance basics.
What is the purpose of auto insurance?
Auto insurance is mandated by the state to ensure each driver has the means to be held financially responsible for victims’ damages should they ever cause an accident. This was put into legislation over 30 years ago with the enactment of The Financial Responsibility Law of 1984. The basic premise is that if someone is careless or negligent on the road and injures you, they should be held financially liable for your damages.
Unfortunately, a lot of people do not play fair; they fail to uphold their responsibility to carry insurance. Some people cite budget limitations as reasons for not carrying insurance, others have suspended licenses and other criminal convictions that bar them from driving, and still others have accidentally allowed for lapses in coverage. Regardless of the reasons, there really is never a viable excuse to break the law. If you cannot afford to carry auto insurance, you cannot demonstrate financial responsibility and should not be on the road.
What does UM/UIM cover?
So, what are you to do if you are in a wreck with an uninsured driver or a driver who carries very little insurance? Enter UM and UIM, coverages created so that you will not be left high and dry in these types of situations when other drivers disobey state laws. Below are brief explanations of what they cover and when they kick in.
- UM – Uninsured motorist insurance covers your damages if ever you are involved in an accident with another driver that does not carry insurance, as well as with drivers who flee the scene of the accident. Your UM will cover your medical expenses, lost wages, and pain and suffering up to your policy’s limit. In PA, the minimum amount of UM insurers are allowed to offer on a policy is $15,000/person and $30,000/accident. You can opt to purchase higher limits.
- UIM – Underinsured motorist coverage works similarly to UM. When you are in an accident with an at-fault party who has insurance but whose limits do not quite cover your damages, you can turn to your own insurance and use your UIM coverage. It will cover your remaining damages up to your policy’s limit. The minimum coverage for UIM is the same as for UM – $15,000 per person/$30,000 per accident.
- UM and UIM can be used not only when you are in a car accident, but also when you are hurt in a bicycle accident or pedestrian accident.
Why is UM/UIM so valuable?
You may be a responsible driver and abide by the state’s auto insurance laws, but not everyone else does. Interestingly, Pennsylvania has one of the lowest rates of uninsured drivers in the nation. On average, approximately only seven percent of drivers in the state do not have insurance, according the Insurance Research Council.
But before you get excited and think that UM/UIM really is not necessary since most drivers are covered, you should be aware that despite the state’s overall low rate of uninsured drivers, the city of Philadelphia has a big problem with uninsured motorists, which explains the high insurance premiums.
One uninsured motorist is one too many and the state does little to punish drivers without insurance. Save receiving a letter in the mail and getting their tags confiscated, drivers are hardly reprimanded for breaking the law. Sure, they can be sued by victims they injure in an accident, but if the uninsured drivers have few assets and a small net worth, there is little that victims can recover from them. And unlike other states, Pennsylvania does not provide for wage attachment; the government will not garnish at-fault drivers’ wages to pay for victims’ damages. Wrongdoers essentially walk away scot-free.
Because of Philadelphia’s problem with uninsured motorists on the street, you have a higher chance of being involved in a car accident with an uninsured driver. Your UM/UIM will be a critical source to help you pay for your medical bills and to make up for any time you miss at work because of your injuries. Do not take the chance of being left with all the bills; make sure you have UM or UIM coverage in case the other driver does not carry the minimum.
What are Pennsylvania’s auto insurance minimum requirements?
To be legally insured, you need to carry at least the state’s minimum requirements. In PA, that means the following.
- Bodily Injury Liability: $15,000/person and $30,000/accident (This covers others’ bodily injury damages when you are at fault.)
- Property Damage Liability: $5,000 (This covers others’ property damage when you are at fault.)
- First Party Benefits Medical Payments: $5000
What other coverages and factors should I consider?
Each person and each family’s needs are different. There are a lot more factors than the state’s minimums to consider when purchasing auto insurance. Consider the increasing costs of medical care, for instance. If you or one of your family members sustain a serious or catastrophic injury, will a meager $15,000 pay for your needs?
Some car accident injuries can be relatively harmless, but consider the fact that a single brain injury (over 50 percent of which are caused by car accidents) can wind up costing you and your family anywhere from $85,000 for a mild injury to $3 million for a serious one, according to BrainAndSpinalCord.org. A $15,000 limit will be but a drop in the bucket to cover your expenses.
The value of your car, any liens you have, your budget, the amount of emergency savings you keep, any additional types of private insurance you may carry, e.g., disability insurance and health insurance are other factors to consider when you are determining how much coverage you need.
Note: Another important thing you need to know about UM/UIM is that those types of coverages only pay for your bodily injury damages – not damages to your vehicle. The only way to recover property damages after an accident with an uninsured or underinsured driver is to turn to your own collision insurance. Collision coverage is optional if you own your car, but highly recommended if your car has substantial value.
The best way to ensure your policy suits your needs is to talk it over with your insurance agent or car accident lawyer.
Whom can I speak to about my accident in Pennsylvania?
If you were recently in an accident in Pennsylvania and have questions about filing a claim or need legal representation, call Cordisco & Saile LLC and speak to an auto accident attorney. The initial consultation is free. Contact us at 215-791-8911 to schedule a meeting at your convenience.