Being involved in an automobile collision, even a minor one, can be a traumatic experience. You are looking at your vehicle and wondering if it can be fixed, and how much it will cost. You may have injuries, or are worried that strains or whiplash will show up when the adrenaline wears off. Then you find out that the other driver does not have insurance.
Sadly, this is not an uncommon occurrence. A 2009 study found that around one in seven drivers in the United States had no automobile insurance, even though every state requires it by law.
What happens with your claim depends on whether you have no-fault or tort liability coverage, who was at fault in the accident, and what kind of coverage you have.
Tort Liability vs. No-Fault Coverage
With a no-fault insurance policy, your own insurance pays for your injuries regardless of who was at fault. In most cases, your medical expenses will be covered even if the other driver did not have insurance. In the case of death or very serious injury, your policy may allow for a lawsuit to recover the higher costs, but the majority of injury claims under no-fault insurance are paid by the driver’s own insurance.
However, no-fault insurance only applies to coverage for injuries. The driver at fault is responsible for property damage. If the other driver is uninsured, the only option to recover your damages is a lawsuit, but chances are good that if they don’t have insurance, they also do not have the financial ability or assets to pay your costs.
In a tort liability state, the determination of who is at fault in the accident indicates who is responsible for the costs of injuries and damage to property. If an at-fault driver has insurance, his or her insurance company will ultimately reimburse you for your medical and car repair bills. Again, it is possible to attempt to sue the other driver, but it is not likely to recover your costs.
Thus if the other driver is at fault and has no insurance, you can be left in a financially devastating situation through no fault of your own. This is where uninsured motorist coverage is vital.
Uninsured Motorist Coverage
If you have uninsured motorist coverage in your automobile insurance policy, it pays for your property damage when you have a collision with an uninsured driver who is at fault. If you have tort liability insurance, the uninsured motorist coverage also pays for your medical expenses.
Some states require all automobile policies to have a minimum level of uninsured motorist coverage. In other places, it is not required by state law, but a particular insurance company may require it as part of even their most basic policies. Other insurance companies leave it completely optional, and in any case, you can opt for a higher coverage level than the mandatory minimum.
How Much Uninsured Motorist Coverage Do I Need?
With the number of uninsured motorists on the road, there is a significant chance that you will have to rely on this coverage at some point. It is important to check your coverage to make sure that it is sufficient to cover most of your most likely expenses in the case of a collision. These include health insurance deductibles and co-pays, and enough property coverage to cover the book value of your car.
If you have questions or concerns about your coverage, contact your insurance agent for a review of your policy.