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Should I Get Uninsured Motorist And Under-Insured Motorist Coverage (“UM”)?

01.18.15

The short answer is: YES! The next question is, “what is insured motorist overage?”An uninsured motorist is a driver without insurance. The repercussions being that if the uninsured motorist is at fault, the victim is limited to getting her bills paid directly from the uninsured motorist.

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Unfortunately, most uninsured motorists are facing their own financial difficulties (otherwise why would they forgo getting insurance). Therefore, when the victim goes to collect for medical bills and car damage, the uninsured driver has little or no money to pay the victim for her physical injuries and damaged car.

“But doesn’t Ohio require that all drivers show proof of financial ability (i.e. insurance coverage) in order to drive?” Sort of.  Ohio does require proof. The problem is that in Ohio, when registering a car or renewing a driver’s license, a driver must simply sign a statement that he has insurance coverage. At that time he does not need to prove to the Bureau of Motor Vehicles (“BMV”) that he has car insurance. A driver can lie on this application about his lack of insurance and still get his license or register his car.

According to the Ohio BMV, a driver must verify he has car insurance under the following four circumstances: (1) when the driver’s accident causes injury or death or more than $400 dollars in property damage and a complaint is filed to the BMV alleging that the driver was uninsured; (2) when a driver fails to produce proof of insurance during a traffic stop; (3) when the driver must appear before court for a traffic offense; and (4) when the driver is randomly selected by the BMV to prove he has insurance coverage.

The BMV reports that of the 280,000 drivers randomly selected for insurance verification from 2005-2008, roughly 9% of those drivers were found to be uninsured. There are around 8 million licensed drivers Ohio. This means there are roughly 720,000 uninsured motorists on the road. This is even more alarming when coupled with a study by the Ohio Insurance Institute, which found that uninsured motorists are at fault 72% of the time.

Okay, You’ve Convinced Me, I’ll Get Uninsured Motorist Coverage, What About Under-Insured Motorist Coverage (“UIM”)?

The minimum level of insurance required in Ohio does not provide much protection for the victim of a traffic accident. Ohio Revised Code section 4509.101 states that a driver need only have a minimum $25k policy to cover the physical injury or death of an individual in an accident.  This may seem like plenty of money but if the injury is serious enough, medical bills alone can run into the six figures.

Imagine this scenario: the under-insured driver has the state minimum insurance policy; he hits your car, whereby you suffer a back injury requiring surgery. If the cost of the surgery is $50k, this would exceed the driver’s coverage by $25k ($50k surgery – $25k state-minimum bodily injury liability insurance = $25k the amount you would need to cover). You would need to cover this difference with your own medical insurance. On the other hand, if you had underinsured motorist coverage of say $60k, the policy would kick in to cover the shortfall of the driver’s state-minimum coverage.

How Much Coverage Should I Get?

As they say, “the more, the merrier.” The Ohio State Bar Association suggests that you buy the same amount of underinsured and uninsured coverage as your liability coverage. At a minimum you should purchase at least $100k in coverage.  According to Bankrate.com, UM/UIM coverage is the least expensive of all of the types of insurance coverage, often times costing only around $1 a month.

The moral of the story is this, if you are driving in Ohio it behooves you to get both a robust uninsured motorist coverage and an under insured coverage. There are certain things in life where it is okay to skimp; UM/UIM coverage is not one of those things.

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