Talking About Insurance Coverage

Expect The Unexpected - Insuring For The Uninsured

5 August 2015 by Jar Ross

Auto insurance - everyone is required to have it. But almost 13% of motorists find a way around the law. Some pay for insurance long enough to register their vehicle and then cancel the policy. Some simply roll the dice and drive with expired tags in addition to expired insurance.

When you are in a car accident, the last thing you are thinking about is insurance. If everybody is required to have it, then you are fine. But that isn't the case. 1 in 8 drivers, almost 29 million people, drive without insurance. This simple fact can cause you a lot of headaches and heartaches if you are in an accident with an uninsured driver.

You are at a higher risk of having an accident with an uninsured driver if you live in these top ten highest states based on estimated percentage of uninsured drivers (2012):

• Oklahoma
• Florida
• Mississippi
• New Mexico
• Michigan
• Tennessee
• Alabama
• Rhode Island
• Colorado
• Washington.

So you got into an accident with an uninsured driver...

States define themselves as either "tort" or "no-fault" in terms of insurance.

No-fault, No Worry (for you, an insured motorist)

In no-fault states, the question of "Who is at fault for the accident?" does not come into play--drivers go to their own insurance companies for payment. So if you live in one of the 12 no-fault states, your insurance company is going to be reimbursing you, no matter what. So whether the other motorist is insured or uninsured isn't as big of a deal. But it is still a good idea to carry uninsured/underinsured motorist coverage, for items such as lost wages or pain and suffering compensation.

Tort (insure or sue)

In tort states, car insurance companies pay for damages based on who is at fault. If the other, uninsured driver is deemed completely at fault, their insurance company would have to cover all damages, yours and the other driver's.

But the other driver doesn't have insurance! In this case, having uninsured/underinsured motorist coverage will really help you. The coverage will cover what the other driver won't...or most likely can't...pay. But you will only be covered up to your policy limits. If your limits are too low to cover all costs, you either have to foot the rest of the bills yourself, or sue the other driver.

To sum up, uninsured/underinsured motorist coverage is a good thing to have whether you live in a no-fault or tort state. But it is doubly important in a tort state because if the other, uninsured driver is at fault and can't pay, your coverage will pay to get you back on the road and back to work. 

To learn more, contact an auto insurance company like Peake Insurance Agency. 

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