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UM/UIM COVERAGE

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Although auto insurance is mandatory, there are cases where you get into an accident with an uninsured driver. A coverage that can protect you from such situations is Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM). This coverage not only protects you from accidents where the other driver doesn’t have liability insurance but also when they have insufficient coverage to pay for your vehicle damages of bodily injury expenses.

Some consumers tend to consider Uninsured Motorist Coverage as unnecessary. However, UM/UIM coverage plays a very important role, and if there is no UM/UIM insurance, people have to go through the hassle of suing the other party to receive compensation for the loss caused by the accident. According to the IRC (Insurance Research Council) 13% of drivers in the U.S are uninsured, and the number isn’t declining.
The state with the highest rate of uninsured drivers is Mississippi (29.4%) followed by Michigan (25.5%), Tennessee (23.7%), New Mexico ( 21.8%) and Washington (21.7%).

 

What is more concerning, is that the accident probability and the amount of damage caused by uninsured drivers is higher than for insured drivers. The top reason for those that don’t have auto insurance is the cost.  However, it has been reported that 40 percent of the eight major accidents in the past decade have been caused by uninsured drivers. Due to this reason, liability coverage is legally required in most states, including Texas.

 

If you get in an accident with an uninsured or underinsured driver and are without UM/UIM coverage, you will have to pay a lot more for hospital bills or car repairs compared to the additional premium for purchasing the coverage. However, if you have the UM/UIM coverage, you can reduce financial expenses for accidents such as hit and run. You and your passengers will receive compensation for medical bills. UM/UIM coverage can also pay for lost wages if you can’t work because of the car accident. It is possible to sue the other driver even if you don’t have UM/UIM insurance, but if the other driver is incapable to provide compensation, you won’t be able to get enough or anything from the other person.

 

UM/UIM insurance is one of the coverages that are included in an auto insurance policy that is so-called full-cover car insurance.  Below are other coverages available in auto insurance that can be customized to the need of each insured.

Liability:

Covers the cost of the other driver’s injuries and property damage if you’re at fault in an auto accident.

Collision:

Coverage that can pay to repair your vehicle if it’s involved in an accident.

 

Other than Collision/ Comprehensive:

Coverage that protects against damage to your vehicle cause by non-collision accidents. For example, theft, fire, flood and vandalism.

 

PIP :

PIP ( Personal Injury Protection) covers medical expenses for you and your passenger if you’re injured in an accident.

 

Towing and Rental Reimbursement:

There are optional coverages such as “towing” and “rental reimbursement”. Rental reimbursement helps pay for your rental car costs while your car is being repaired due to a covered accident.

 

Q) What should you do if you get into an accident with an uninsured driver?

First, call the police to the scene of the accident.
Unless it is a major accident, the police may not come to the scene, but it is recommended that you report the accident.
Although it may be difficult to do so amid all the shock, having a police report can provide evidence when filing a claim. You should also contact your insurance agent if you need any assistance with filing a claim.

 

 

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Business Auto Insurance

Business Auto Insurance   

When buying a car, you will be asked to present a proof of insurance. So how is personal and business auto insurance different? Does personal auto insurance fully cover business auto? How should you purchase insurance for commercial vehicles? Below are answers to frequently asked questions.

Some may think personal auto insurance will provide coverage for running a business at home. However, it doesn’t always provide coverage for using a personal car for business purposes. This is why it’s important to consult with an insurance agent. There are two major variables to check. One, is  how often you use your vehicle for business. The second is what purpose you use it for. Reviewing the usage will  help determine the appropriate type of coverage.

Vehicles registered under a business, should be insured under business auto insurance. The same goes for vehicles that are owned by an individual but used exclusively for business purposes. Commercial auto insurance is essential to protect businesses.  This is considering that claimants can file lawsuits against businesses for more compensation in the event of an accident. Another important fact to keep in mind is that General Business Insurance (Liability or Property Insurance) does not cover accidents caused by business-owned vehicles.

 

Types of Coverage

Commercial auto insurance, like personal auto insurance, has similar coverages. Among them, liability is the most important coverage to protect your business. This can be divided into two parts: Bodily Injury and Property Damage. Bodily injury protects your business when you or an employee is responsible for injury or death of others in an auto accident. Property damage covers damage to another person’s property caused by an auto accident. Next, medical payment coverage helps pay medical expenses for occupants who are injured while using the business auto.  These are mandatory coverages required by most states.

There are optional coverages such as “collision” and “comprehensive”. Collision covers the business’ car repair costs in the event of an accident. Comprehensive covers losses from natural disasters and theft.

In some states, it is mandatory to purchase uninsured or under-insured motorist coverage. This coverage protects you when you are in an accident with another driver that doesn’t have insurance or insufficient coverage to pay for your damages.

There are additional coverages such as “towing” for when you need to take your vehicle to a repair shop.

Another is “rental reimbursement”.  This coverage helps pay your rental car costs while your car is being repaired due to a covered accident.

Commercial Auto premium

One way to reduce costs is to increase the deductible for collision coverage. As for liability coverage, maintain sufficient limits.
Each state has a different minimum limit for liability insurance. However, most of those limits are not enough to protect the business. Liability helps pay for  hospital expenses, loss of income, and property damage. If you get into an accident and don’t have enough liability limit, the other party will most likely go after the business.  $500,000 to $1 million in liability coverage is recommended for commercial auto insurance.

Another option is to opt out on collision coverage for vehicles that are old.  If you get into an accident and the cost of repair is higher than the current market price of the car, insurance companies pay the cash value instead of the cost of repair. Therefore, you should consider if collision coverage is necessary in your case.

Business auto insurance is likely to be higher than personal car insurance in terms of cost. However,  it is better to have insurance that will properly cover you in an accident.

Contact us today to learn more or to get a quote.

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