Uninsured Motorist Coverage Is Not Expensive

A recent New York Times’ Your Money podcast had an interview with reporter Paul Sullivan about reviewing one’s insurance coverage. I was surprised to hear him saying uninsured motorist coverage in auto insurance is important but it’s expensive. I had to rewind and make sure I heard it right because that is not my experience. I’ve had uninsured motorist coverage for many years and it’s never expensive.

I found the article Paul Sullivan wrote in New York Times: Time for an Insurance Checkup, as Needs and Options Change. The part about uninsured motorist coverage said (bold emphasis added by me):

"Uninsured motorist coverage is another thing to check on your policy. It is pretty expensive — a couple of hundred dollars a year for each $1 million in coverage — but that is because it is meant for your protection against someone without insurance who damages your car or injures you."

I still don’t quite understand. Is it possible he confused uninsured motorist coverage with an umbrella policy?

Unless the article is intended for millionaires with Cadillac policies I haven’t seen, I don’t think uninsured motorist coverage comes in increments of $1 million. The coverage options from the companies I dealt with are similar to those for bodily injury liability: $50,000, $100,000, $300,000, etc. An umbrella policy, on the other hand, typically starts at $1 million and goes up in $1 million increments.

It just so happens my auto insurance is up for renewal. The cost for $300,000 uninsured motorist coverage is a little less than 10% of the total premium. It’s not expensive at all.

For someone with good health and disability insurance, there is duplication in coverage when you buy uninsured motorist coverage. If you are injured by an uninsured driver, your health insurance will pay your health care bills and your disability insurance will pay you if you are disabled. A large part of the uninsured motorist coverage from your auto insurance will be used to reimburse your health and disability insurance company. But at such low cost, I would still buy uninsured motorist coverage just to fill in the gaps and not worry too much about duplication.

Do you have uninsured motorist coverage? Am I just lucky or is it not expensive for you either?

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Comments

  1. serbeer says

    Yes, kept trying to figure out why one needs uninsured motorist coverage if one has comprehensive insurance to cover car damage and heath/disability for personal injury.

    My best guess at it is that it would cover time off work if required and your passengers that may not have health/disability insurance. Anything else you can think of?

  2. Matt says

    Even cheaper here. I have uninsured coverage for $500k for any one accident. The cost of this coverage is much less than $100 and is less than 3% of my total premium.

  3. Martin says

    The cost of uninsured/underinsured coverage depends on the state and it is expensive in some states. I remember that it was very high in Pennsylvania, but has not been that high in North Carolina, where I live now.

  4. David Ihnen says

    Yes, its expensive… for motorcycles.

    Its 34% of a motorcycle insurance quote I just got from allstate.

    and with progressive, it was FIVE TIMES the entire rest of the policy – 740 for the uninsured line item vs. 170 for the ENTIRE liability/comprehensive policy. as you might imagine, I skipped that coverage.

  5. Robert says

    Its very expensive for motorcycles. I’m not sure why. I carry it on my car, aircraft, and boat but its just too expensive to justify on the motorcycle.

    -Robert

  6. Mari says

    My husband and I were just involved in a car accident (with injuries)where the car at fault had minimal insurance. Thank Goodness we had uninsured motorist because what that did for us was we were compensated for our injuries with OUR policy. Highly encourage everyone to obtain. Read previous message and quite sure he must have confused the umbrella policy with uninsured M insurance. Godspeed to all. Mari

  7. GoJoe says

    Mari is right. There’s a lot more loss to an individual and his family other than the individual’s medical bills. Anything you should have gotten from the responsible party gets paid from your uninsured/underinsured motorist coverage. Yes, underinsured. Look at your State minimums…$15k, $20k? You can’t get a chopper ride to the ER for that kind of cash and poor folks (God bless ‘em) have poor or no insurance. Lost wages, pain and suffering, home health care instead of hospital, medical deductible out of pocket expenses, a gardener, additional child care, any personal items that got destroyed. Got disability insurance? Great but, it’s only for 60% or maybe 70% of your wages and that’s only after your sick pay is burned up. Um/uim will make up the difference. Yep, I’m in the insurance business. Check with a qualified agent and stop self-medicating. It doesn’t cost any more to use an informed agent than using a rubber stamper so get your heads out of the sand and shop around. There are many umbrella policies out there that will allow $1M in um/uim on top of what you get from your auto policy. Does it make sense to be prepared to pay someone else more than yourself in case of an accident (liability coverage vs. um/uim)? Lastly, your liability coverage pays for your passenger(s), not your um/uim.

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