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UM/UIM and the ERA of Smarter Auto Insurance

In these uncertain times, prudent financial decision making is imperative, especially when it comes to protecting you and your family. Today, we delve into why Uninsured/Underinsured Motorist (UM/UIM) coverage is a crucial addition to your auto insurance policy.

The Value of UM/UIM Coverage

UM/UIM coverage is a beacon of security in the unpredictable landscape of driving. It steps in where your regular coverage may fall short: covering costs when an at-fault driver lacks adequate insurance.

Cost vs. Benefit: A Smart Financial Play

Adding UM/UIM coverage to your auto policy in California is surprisingly affordable. Typically, it amounts to just 5-10% of your total premium. For example, on a $1,200 annual premium, UM/UIM might only add $60 to $120 a year. This small addition translates to a mere $5 to $10 monthly, a trivial amount compared to the hefty costs of accidents involving uninsured or underinsured drivers.

Examples Where Coverage Is Necessarya

The Unforeseen Hit-and-Run: Sarah's Story

Sarah, after a long day at work, returned to the parking lot to find her car with a crumpled bumper and shattered taillights. Someone had hit her car and hadn’t even left a note! The perpetrator had vanished without a trace, leaving Sarah with a damaged vehicle and a heavy burden. However, Sarah had wisely opted for Uninsured Motorist (UM) coverage in her auto insurance policy. Thanks to this foresight, her insurance company stepped in, covering the repair costs in full. Sarah's story could have been a tale of stress and financial burden, but her UM coverage turned it into a narrative of relief and gratitude, highlighting the importance of being prepared for the unexpected.

The Underinsured Driver Dilemma: John's Encounter

John's day took a dramatic turn when his commute home was interrupted by a sudden collision. Another driver, distracted and hurried, had failed to stop in time, crashing into the back of John's car. Thankfully, there were no injuries, but John's car sustained significant damage. The other driver was cooperative but carried only the most basic insurance coverage, insufficient to cover the full extent of the damage (typically only $5k property damage). Here, John's Underinsured Motorist (UIM) coverage saved him. His insurance provider assessed the situation and covered the difference, ensuring that John's car was repaired without imposing a financial burden on him.

The Uninsured Motorist Mishap: Emily's Challenge

Emily experienced the unexpected when an uninsured driver ran a red light, resulting in a significant collision. While Emily sustained injuries requiring medical attention, the other driver admitted to having no insurance. Facing mounting medical bills and car repair costs, Emily turned to her insurance policy. Her decision to include Uninsured Motorist (UM) coverage proved invaluable. Her insurer covered her medical expenses and car repairs, alleviating the financial stress of the accident. Emily's ordeal underscores the critical role of UM coverage in providing a safety net, ensuring that victims of such unfortunate events are not left to bear the burden alone.

The Impact of Economic Downturns

During economic recessions, it's common for people to cut costs, often by opting for minimal insurance coverage. This trend increases the number of underinsured or uninsured drivers, especially in California. With more drivers carrying minimal limits, the risk of insufficient coverage in accidents rises, underscoring the importance of having UM/UIM coverage.

Consider that the average cost of a non-fatal car accident can easily exceed $20,000 in medical expenses and vehicle repairs. Without UM/UIM coverage, you could be responsible for these costs if the at-fault driver is uninsured or underinsured. In contrast, a small monthly investment of maybe just $5 in UM/UIM coverage can save you from this potential financial burden. This benefit can be added to any personal insurance policy and gives the policy holder more financial control and greater peace of mind.

Feel free to reach out with any questions or comments regarding this post. Your insights and inquiries are always welcome around the horn!

Kyle J. Wunderli

Attorney at Law

Legal Disclaimer: The information provided in this article is for informational purposes only and does not constitute legal advice. The material discussed is solely the opinion of the author and should not be relied uponas legal advice. Each individual’s legal situation is unique and requires consultation with a qualified attorney. Big League Law, Inc. does not accept any responsibility for any loss which may arise from reliance on information contained in this article. This article does not establish an attorney-client relationship. For legal advice specific to your situation, please contact a licensed attorney in your jurisdiction.



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