Uninsured Motorist | Under-Insured Motorist Coverage (UM/UIM)

Typical Umbrella Policy Claims

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If someone slips and falls on your stairs or is hit by a falling tree limb, your umbrella policy will cover these injury claims. You may think these types of incidents are few and far between, and you’d be right. Only 8% of personal umbrella causes of loss are home and property related. A whopping 92% of claims, however, are auto-related.

Your auto insurance policy usually has some sort of umbrella coverage you can purchase, but what if you are hit by an uninsured motorist and your expenses exceed the coverage you have? What if you cause an accident that results in a debilitating injury to another driver or passenger? Mutual Assurance offers UM/UIM (uninsured motorist and Underinsured Motorist) coverage to help you manage these types of incidents.

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What is UM/UIM Coverage?

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Uninsured Motorist (UM) coverage protects you when the responsible party liable for the accident doesn’t carry auto liability insurance and they’ve injured you or damaged your automobile. Hit-and-run accidents are often paid under this coverage.

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Underinsured Motorist (UIM) coverage provides you with protection in an accident if the responsible party liable for the accident injures you or damages your car but doesn’t have enough insurance coverage to fully pay your medical bills or repair your car.

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Why UM/UIM Insurance Matters

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According to the National Highway Traffic Safety Administration (NHTSA), nearly one-third of motorists in the US have no auto insurance coverage or carry only the state-mandated minimums. That’s every one-in-seven drivers that will

not have enough insurance to cover your losses should they cause a bad accident in which you are involved. 

While it is illegal to drive a car in Virginia without insurance, the minimums are fairly small, particularly if an injury requires months, if not years, of physical therapy or incapacity. These requirements are:

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• Bodily Injury - $25,000 per person and $50,000 per accident

• Property Damage - $20,000 per accident

 

Virginians, of course, aren’t the only drivers on Virginia roads. College students, transient workers, tourists, and drivers using the interstates to pass through are everywhere. They may come from states where auto insurance isn’t required or whose minimums are less.

Some Virginia Drivers Have Found a Work-Around

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In difficult times, automobile insurance may be a purchase many consumers will forego. The penalty for driving a car with a Virginia license plate without insurance is $500. Some Virginians will cancel their policies with the hope of never being stopped by police or being in an accident, saving the cost of auto insurance.

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Driving in 2022

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In addition, in 2022, the NHTSA compared traffic data from before and during the pandemic and found that roads have been more hazardous in the COVID era. Why? An increase in alcohol, marijuana, and opioid-related incidents. Almost 65% of drivers who cause an accident exhibited a higher prevalence of drug and alcohol use during the second half of 2020, compared to 50.8% before the pandemic.

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Empty roads and a distanced police presence also contributed to more reckless driving, less seat-belt wearing, and more impaired driving. While the frequency of accidents is down because fewer drivers are on the road, the severity of these accidents is up because of these factors, and the claim amounts are exponentially higher as well.

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According to wallethub.com, Virginia is the 7th worst state to drive in due to road congestion, poor road condition, and speeding. The commonwealth also ranks 2nd in terms of car repair and maintenance costs, making the need for UM/UIM coverage more critical.

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Social Inflation

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We also live in a time of “social inflation” where people are more likely to sue and juries tend to favor plaintiffs in their judgments with higher awards. According to Eric Raudins with RLI Corporation, “Some injuries that a few years ago might have been worth $100,000 may be worth $300,000 today, and it’s not unusual for some attorneys to make policy limit demands right out of the gate.”

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Mutual’s UM/UIM Coverage

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Mutual Assurance is offering assureds UM/UIM coverage in the personal umbrella policy at a limit of $1,000,000. Members are required to have an underlying UM/UIM limit of $500,000 with their auto policy. The cost of this additional coverage is $150 for the first car and $50 for each additional vehicle.
Having peace of mind that your expenses will be covered whether you cause or are injured in a car accident is so much easier with this coverage added to your Umbrella policy. For more information, contact your Mutual Assurance advisor.