Whether you are on the road, on the water or riding down a trail, one of the risks that you face 'behind the wheel" is being injured in an accident caused by a irresponsible driver, boater or rider. Let's face it - someone who operates their vehicle irresponsibly is unfortunately also less likely to be adequately insured.
If you seriously hurt in an accident, this could have serious financial affects going forward. While I hope that you have good health insurance to cover your resulting medical bills, that won't cover your lost income if you can't work or the special care or assistance you could need if permanently disabled.
Uninsured and Underinsured Motorist coverage protects you financially if you are injured in an accident caused by someone without any insurance (Uninsured Motorist coverage) or someone with low limits insufficient to fully compensate you for the financial effects of your injury (Underinsured Motorist coverage). Another risk that you face is an accident caused by a hit and run driver; if that driver can't ever be identified, they are "uninsured" for all practical purposes, as you aren't going to be able to collect under their Liability coverage.
Whether you carry this coverage (and how high of limits you carry) could have a serious impact on both your financial future and your quality of life after a serious accident for which someone else is at fault. This coverage is often overlooked but is quite important.
Here's some information on how this coverage works for different types of insurance policies:
On your Auto policy
Minnesota Auto policies are required to include both Uninsured Motorist and Underinsured Motorist coverage, at no less than limits of $25,000 per person and $50,000 per accident. However, most policies are written with higher Uninsured/Underinsured limits equal to your Bodily Injury Liability coverage, which is usually a very small percentage of your overall policy premium.
On your watercraft policy
Unlike Auto policies, watercraft policies don't always include this valuable coverage, even though there are many, many boats out on the water without any insurance at all. Protecting yourself against uninsured boaters is quite inexpensive - maybe $10 or $20 dollars a year on average. Therefore, we usually include it as a standard coverage included on watercraft policies we quote. However, we see many boat policies purchased elsewhere that don't include this valuable protection.
On your motorcycle, ATV or snowmobile policy
Powersports policies also aren't required to carry this protection. Unlike Auto and Watercraft policies, there is a much higher risk of being injured on a bike, sled or four wheeler; so Uninsured/Underinsured Motorist becomes a more expensive option. But for the same reasons, it is protection you should seriously consider paying for. Because of the added expense, we offer this as optional and encourage our clients to seriously consider adding this protection to their powersports policy.
On your Personal Umbrella policy
Personal Umbrella policies provide an additional layer of Liability coverage if you are sued for more than the limits on your Auto, residential, boat or powersports policy. Many Umbrella policies also offer the option to add Excess Uninsured/Underinsured Motorist, which broadens your additional layer of protection, so that it covers not only your risk of being sued if the car accident is your fault to also your risk of financial loss as the victim.
Regardless what we include on our initial quote, we give our clients the final choice on what optional coverages are included in their policies.
Ken Cobb is owner of Pine Country Insurance and has been active in the insurance industry for over 15 years. Meet Ken.
Coverage descriptions found in this blog are summaries provided for general educational purposes and cannot fully detail the terms, conditions, limitations or exclusions of a specific insurance policy. Please read your policy carefully.