As I’ve been looking at all my posts from last year, and reading the responses that many of you made to them individually, one post stood apart from the rest and generated more clicks than others for several weeks running: Uninsured/Underinsured Motorist Coverage 101. Information that popular certainly bears repeating, so please read on to learn more about this essential coverage in a guest piece by Big “I” Umbrella Program Manager, April Shrewsbury.
Uninsured/Underinsured Motorist Coverage 101
We’ve all heard the stories. A family of five is burdened with horrific medical bills because of an accident caused by a drunk driver who couldn’t afford insurance due to his bad driving record. A child walking to school faces a lifetime of difficulty after being struck by a texting driver-a struggling college student with state minimum auto limits. A pair of retired sweethearts fall victim to a hit-and-run driver.
As an insurance agent, you can’t physically protect your clients from heartbreaking situations like these…but they do rely on you to protect them financially when tragedy strikes. This is where excess Uninsured/Underinsured Motorist Coverage enters the picture.
MOST PEOPLE WOULD BUY IT IF THEY UNDERSTOOD IT
How effectively can you explain UM/UIM coverage to a client who doesn’t know much about insurance? In layman’s terms, UM/UIM coverage is insurance that pays for the client’s injuries from an accident caused by the owner or operator of an uninsured or underinsured vehicle. Excess UM/UIM from a personal umbrella policy pays after the auto policy’s UM/UIM limits have been exhausted.
It’s important for a client to understand that UM/UIM coverage comes into play when an insured is involved in an accident and the person who caused it either doesn’t have any insurance or doesn’t have enough insurance to pay for your client’s injuries. It would also come into play if they were the victim of a hit-and-run (in a vehicle, on a bike, or as a pedestrian), leaving them with nobody’s insurance policy to collect against…making it an “uninsured” motorist claim.
THE PREVALENCE OF UNINSURED AND UNDERINSURED DRIVERS
According to recent estimates by the Insurance Research Council (IRC), roughly one in seven drivers is uninsured. Add to that the number of drivers who carry state minimum auto limits, and it’s enough to make a person want to stay home for good.
Unfortunately, this should come as no surprise, given the type of TV commercials we see these days from some auto insurance companies. Too often, the emphasis is on getting a cheap rate, and drivers are besieged with ads about that encourage them to buy “state minimum” auto limits in order to save money. There’s no denying that it can be a temptation in a struggling economy. All the more reason to make sure your clients are protected from the drivers around them, with UM/UIM coverage on both their auto and personal umbrella policies.
Andrew McElhannon is the Member Services Coordinator for the Independent Insurance Agents of Georgia www.iiag.org, and can be contacted at: email@example.com or b y phone at 770-458-0093, x.110, or 800-878-6487.