Gas prices at the pump have dropped by half. A year ago gasoline hovered around $4 per gallon in North Alabama — now it’s crashed below the $2 mark. Filling the tank has gotten a lot less painful, and I find myself driving more because of it. Since the average US household uses around 1,000 gallons of gas per year, that equates to a “savings” of $2,000.
So, what would you do with an extra $2,000? I have a practical, driving-related suggestion for you – at least for just a few dollars of it. Make sure the amount of your uninsured and underinsured motorist insurance coverage is appropriate, and increase it if you need to. Compared to liability, comprehensive, and collision insurance policies, UM/UIM can be pretty affordable and is one of the most cost-effective types of insurance you can buy.
What is UM/UIM Insurance and Why Do I Need It?
Uninsured and underinsured motorist policies cover you and your family in the event you are hit by a driver who either doesn’t have insurance, doesn’t have enough insurance, or (even worse) is a hit-and-run driver. UM/UIM coverages exist to protect you financially from irresponsible drivers. In a perfect world we wouldn’t need that kind of insurance. But, in ours, we do.
Wait, isn’t everyone required by law to have insurance? Yes, for those of us who follow the law, the minimum amount of bodily injury liability insurance required in Alabama is $25,000 per person (up to a total of $50,000 for multiple people who are injured in a single accident), and the minimum amount of property insurance is also $25,000.
Given a serious wreck, it is easy to see how these limits may not cover all the bodily injury, lost wages, and property damage needs — and that’s when the at-fault driver has coverage. The Insurance Research Council estimates that 1 in 7 drivers isn’t even insured!
If you were in an accident that wasn’t your fault, typically you’d contact your insurance company and file a claim with the at-fault driver’s car insurance company, get your car repaired, and be compensated for any lost wages and medical expenses. No out-of-pocket expenses to you. However, if the at-fault driver doesn’t have insurance or doesn’t have enough insurance, you’ll need to pay out-of-pocket for damages and medical expenses not covered by the other driver — unless you have uninsured or underinsured motorist coverage.
Ask The Questions and Make The Call
Uninsured and underinsured motorist insurance is NOT required by law in Alabama. Some drivers have it, and others don’t. The important questions for you to ask are: do I have that coverage and, if so, how much do I have? Also, how much coverage would be enough if you or a family member were seriously injured? Everybody’s situation is different.
Think about those things, and call your insurance agent to discuss the answers to your questions. That call would be an ounce of prevention I’d suggest to anyone — before a motor vehicle collision changes your future.
There are countless true-life tragedies about folks who didn’t have UM/UIM coverage. The 20-something-year old woman who suffered a broken neck when her car was T-boned and who faced over $400K in medical bills — far exceeding the at-fault driver’s $25K policy. The motorcyclist, survived by two beautiful young daughters, who was killed when he was run off the road by a hit-and-run driver whose identity was never determined. We’ve seen this. Don’t make us go there again. Call your agent for a quote. Get this insurance if you can, while you can. Your family deserves it.