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Why You Need Uninsured and Underinsured Motorist Coverage

The Uninsured Motorist Problem

The number of uninsured motorists is much larger than most people think: according to a recent study from Insurance Research Council (IRC), approximately one in six drivers across the United States were driving uninsured in 2010.

The uninsured motorists problem vary widely from state to state. In 2007, the five states with the highest uninsured driver estimates were New Mexico (29 percent), Mississippi (28 percent), Alabama (26 percent), Oklahoma (24 percent), and Florida (23 percent). The five states with the lowest uninsured driver estimates were Massachusetts (1 percent), Maine (4 percent), North Dakota (5 percent), New York (5 percent), and Vermont (6 percent).

The report also found a relationship between the percent of uninsured motorists and the unemployment rate: An increase in the unemployment rate of one percentage point is associated with an increase in the uninsured motorist rate of more than three-quarters of a percentage point. "An increase in the number of uninsured motorists is an unfortunate consequence of the economic downturn and illustrates how virtually everyone is affected by recent economic developments," said Elizabeth A. Sprinkel, senior vice president of the IRC. “Responsible drivers who purchase insurance end up paying for injuries caused by uninsured drivers.”

Uninsured or Underinsured Motorist Coverage: What it can do

To protect yourself against an accident involving an uninsured driver, you should consider adding uninsured and underinsured (UM/UIM) motorist coverage to your overall auto insurance policy. UM/UIM coverage will pay for injuries to you and your passengers, and in some states, damage to your property when there is an accident and the other driver is both legally responsible for the accident and considered "uninsured" or "underinsured." An uninsured driver is someone who did not have any insurance, had insurance that did not meet state-mandated minimum liability requirements, or whose insurance company denied their claim or was not financially able to pay it. An underinsured driver is someone who met minimum legal financial responsibility requirements, but did not have payment limits high enough to cover the damage they caused. In these cases, UM or UIM coverage will pay you for your damages; this coverage, in effect, takes the place of what the other driver should have purchased but did not. It is important to remember that uninsured and underinsured motorist coverages are separate, although in many states they can or must be purchased together.

The following states require drivers to carry UM/UIM (some only UM) coverage:

  1. Connecticut
  2. Illinois
  3. Kansas
  4. Maine
  5. Maryland
  6. Massachusetts
  7. Minnesota
  8. Missouri
  9. New Hampshire
  10. New Jersey
  11. New York
  12. North Carolina
  13. North Dakota
  14. Oregon
  15. Rhode Island
  16. South Carolina
  17. South Dakota
  18. Virginia
  19. Washington DC
  20. West Virginia
  21. Wisconsin

In many other states, insurance carriers are required by law to provide you with UM/UIM coverage unless you reject it in writing.

With so many states requiring UM/UIM in addition to liability coverage, and most of the others requiring you to explicitly reject such coverage in writing, you know that it's a pretty good idea to get UM/UIM coverage even if your state does not require it.

Full List of Uninsured Motorist Rates by State (2007)

See below for the full list of states and the 2007 Uninsured Motorist rate as published by the IRC:

  1. New Mexico 29%
  2. Mississippi 28%
  3. Alabama 26%
  4. Oklahoma 24%
  5. Florida 23%
  6. Tennessee 20%
  7. California 18%
  8. Arizona 18%
  9. Michigan 17%
  10. Washington 16%
  11. Ohio 16%
  12. Kentucky 16%
  13. Texas 15%
  14. Nevada 15%
  15. Arkansas 15%
  16. Wisconsin 15%
  17. Illinois 15%
  18. Montana 15%
  19. Colorado 15%
  20. Washington DC 15%
  21. Indiana 14%
  22. Missouri 14%
  23. Rhode Island 14%
  24. Alaska 13%
  25. Maryland 12%
  26. Hawaii 12%
  27. Louisiana 12%
  28. Iowa 12%
  29. Minnesota 12%
  30. North Carolina 12%
  31. Georgia 12%
  32. New Hampshire 11%
  33. Oregon 11%
  34. Delaware 10%
  35. Kansas 10%
  36. Connecticut 9%
  37. Virginia 9%
  38. South Carolina 9%
  39. Idaho 9%
  40. Wyoming 9%
  41. New Jersey 8%
  42. Utah 8%
  43. Nebraska 8%
  44. West Virginia 8%
  45. Pennsylvania 7%
  46. South Dakota 7%
  47. Vermont 6%
  48. New York 5%
  49. North Dakota 5%
  50. Maine 4%
  51. Massachusetts 1%

Source: Insurance Research Council, 2007