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Uninsured Motorist and Underinsured Motorist Coverage Explained

Posted on November 7, 2011 by Active Insurance

Auto Insurance has plenty of terms and abbreviations which can confuse the consumer, and “UM / UIM” is one of those. However don’t be put off: this extension to your auto insurance policy is one of the most important coverages on an automobile insurance policy.        

    

 What is Uninsured motorist and Underinsured motorist coverage?

 UM stands for uninsured motorist and UIM stands for underinsured motorist.  If you have an accident with someone who is uninsured or underinsured and is ultimately at fault for injury or damage caused to you or your passengers, UM and UIM will provide coverage . UM / UIM is included in your auto insurance policy in Illinois and Wisconsin and is optional in some states including Indiana. 

 In virtually every state, automobile liability insurance is required by state law. This means every driver must buy an insurance policy which protects them in case they are found liable for causing injury to another person, or damaging another person’s property while operating their automobile. However, there are fairly low minimum amounts of insurance required in most states. In Illinois, for example, the state-required, or mandated insurance liability limits are $20,000 per person, $40,000 per accident, $15,000 property damage and $20,000 per person, $40,000 per accident uninsured and underinsured motorist liability.  A serious auto accident could end up costing far more than that. So if you or your passengers are injured by a reckless driver, even if that driver has insurance for the legal minimum, it might not be enough to fully compensate you for your injuries.

 Uninsured motorist property damage (UMPD)

 Uninsured motorist property damage is a very inexpensive option for drivers who don’t have collision coverage and are concerned about damages to their vehicle if an uninsured motorist were to hit their car. One catch is that hit and run accidents are usually not covered because you must be able to identify the uninsured motorist and many times they leave the scene of the accident because they know they will be fined and possibly arrested for driving without insurance. 

 (Let Active Insurance help you find low-cost auto insurance now)

 How does Uninsured motorist and Underinsured motorist coverage work?

Let’s say a reckless driver runs a red light and hits your car: it’s a total loss and you are injured. You go to exchange each other’s insurance details and it quickly turns out that the driver has none. At this stage the police will likely have their own issues, including dangerous driving and not having insurance, but how about your problems? If you have Collision coverage then your insurance company should cover the cost of the car based on its current value, but even Collision won’t pay damages for the injuries and pain and suffering you believe you are owed.

Uninsured motorist and Underinsured motorist coverage will also cover you if you are hit by a car while you are crossing the street or while riding your bicycle. 

 

UM/UIM

 At this point an odd thing happens: you can make a UM / UIM claim on your own insurance policy for those damages which rightly should have been paid by the other driver’s own insurance policy —if he had bought one. Suddenly, your insurance company now acts like the other driver’s insurance company: you are claiming pain and suffering, and it is your own insurance company you are claiming it from because the other driver was an Uninsured Motorist.  Even if the other driver did have the Illinois minimum auto limits of $20,000 per person, $40,000 per accident but this is not enough to fully cover your injuries you may still make a claim because those limits are insufficient to address your needs; in other words the driver was an Under-Insured Motorist.

 

An Imperfect Solution for an Imperfect World.

In a perfect world, everyone buys enough auto insurance, and so once fault is determined the insurer of the at-fault person would pay up. However the real world is very different and UM / UIM coverage exists to help paper over imperfections. It is unfortunate that part of the UM / UIM claim process may result in transforming your insurer from advocate to opponent, but that should not deter consumers from buying the coverage and then pursuing a claim if it is warranted —even though it is against their own insurance company.

 Cynthia Garcia, marketing Director of Active Insurance Agency which arranges thousands of auto policies for Illinois drivers says. “It’s a regrettable fact of life that too many drivers in Illinois, Indiana and Wisconsin do not buy mandatory auto insurance. This exposes law-abiding drivers to having no recourse for compensation for loss suffered from an accident with an uninsured driver. Uninsured motorist and Underinsured motorist coverage and uninsured motorist property damage is a cheap way to provide just such a source.”            

 

About Active Insurance:
Active Insurance Agency has provided low cost auto insurance for drivers in Illinois, Indiana and Wisconsin for nearly 50 years. Its online car insurance quotes make comparing automobile insurance rates quick and easy. Best of all, no credit score or driver’s license number is needed to get a quote. Active Insurance also won’t ask for your Social Security number, so you can keep your confidential and personal information private. If you need a bond card, Active Insurance Agency has those too.

 

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What kind of Illinois vehicle insurance is necessary

Posted on September 8, 2011 by Active Insurance

Drivers looking for Illinois vehicle insurance have a range of choices, and shopping for auto insurance online is an easy way to find a deal.

Knowing how much insurance you need is important, because you don’t want buy too little or too much insurance. Here are some tips to help make sure you have the correct amount and types of Illinois vehicle insurance, starting with the minimum needed:

Minimum requirements

The state has minimum Illinois vehicle insurance policy coverage requirements. Liability coverage must be at least $20,000 per person and $40,000 per accident of bodily injury coverage to cover any injuries or deaths you cause while driving. This means that if more than one person is injured or killed, the most that is payable to one person is $20,000 and the most that could be paid per accident is at least $40,000. The vehicle must also be insured for $15,000 in coverage to cover property damage caused by the driver of the car in an at-fault accident. The state also requires uninsured motorist coverage of $20,000 per person and $40,000 per accident. This covers you for the bad driving habits of uninsured motorists who may hit your car. For example, if a drunken driver vehicle hits your car, and they don’t have Illinois vehicle insurance, you want to be covered for any damage to your car or to pay for medical coverage.

Drivers must have proof of Illinois vehicle insurance with them while driving, through Illinois insurance cards insurers are required to provide to customers. Other forms of proof of Illinois vehicle insurance to show a police officer or the department of motor vehicles include the most current declaration page of your Illinois vehicle insurance policy.

Drivers found to not have Illinois vehicle insurance can be fined a minimum of $500 and can lose their drivers license for a minimum of three months, for a first time offense. have their vehicle registration suspended. Repeat offenders can have their vehicle registration suspended for four months, when the car is not allowed to be driven. The minimum fine for driving a car with a suspended license plate is $1,000.

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Medical payments:

This covers the medical expenses of people in your car. Medical payments are usually lower coverages than the bodily injury and are “no fault” meaning the medical bills will be paid no matter who was at fault in the accident.

Collision coverage:

Another important part of Illinois vehicle insurance is collision coverage, which pays for repairs to your car, after paying the deductible if the vehicle is damaged in an accident. Repairs are done no matter who is at fault in the accident. High deductibles for collision coverage, like $1,000 are one way to reduce Illinois vehicle insurance premiums.

Comprehensive insurance

Comprehensive coverage protects your car from non-collision losses such as a tree branch falling on your car, other natural disasters like floods, or someone vandalizing or stealing your car, and other things that happen outside of an accident.

Uninsured motorist property damage:
This coverage pays to fix your car if your car is hit by an uninsured motorist. You are responsible for paying a $250 deductible and the insurance company takes care of the claim. Some people call this “liability plus”.

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Illinois Auto Insurance Law

Posted on March 29, 2011 by Active Insurance

Auto Insurance in Illinois

Although the law in Illinois requires drivers to maintain liability insurance on their vehicles few people understand exactly what it means.  We consulted one of our favorite sources for definitions, “That’s What It Means” by Peter Woan

Liability insurance covers you if you do something that causes either harm to another person or damage to another person’s property.  In Illinois, automobile insurance is mandatory which means if you are driving a vehicle you must be sure the vehicle is insured.  The state of Illinois requires:

  1. Bodily injury  or “BI” of $20,000 per person and $40,000 per accident. Bodily injury is injury to a third party – in other words, someone other than you.
  2. Property damage or “PD” of $15,000 per incident. This means damage to someone else’s property, such as their vehicle or something like a fence or a light pole.
  3. Uninsured/underinsured  motorist coverage or “UM/UIM” of $20,000 per person and $40,000 per accident. If the insured is injured in an accident caused by someone else who either has no insurance (uninsured) or does not have enough insurance to pay the claim (underinsured) the insurance company of the insured will provide coverage.

[Let Active Insurance help you find low-cost auto insurance now]

There are two optional liability coverages which are not required by law but are available for purchase.

  1. Medical payments.  This pays the driver and the occupants of the vehicle for injuries regardless of fault.
  2. Uninsured motorist property damage (UMPD).  This is sometimes referred to as “Liability Plus”.  If your vehicle is damaged by an uninsured driver this coverage will repair your vehicle subject to a deductible (usually $250).  This is an option for someone who is looking to save money and not purchase comprehensive and collision (full coverage).  It won’t fix your car if you are at fault or if the other driver has insurance but it is there for you if the other driver is at fault and uninsured.

One additional benefit of having liability insurance, in addition to complying with the law, is that you have insurance coverage as a pedestrian too.  You don’t have to be in your vehicle  for the uninsured/underinsured motorist coverage (UM/UIM) to be available to you.  And this coverage is available to you and all drivers who are listed on your policy.

Active Insurance Agency has been providing low cost auto insurance for drivers in Illinois, Indiana and Wisconsin for nearly 50 years. Their online car insurance quotes makes comparing automobile insurance rates quick and easy. Best of all, no credit score or drivers license number is needed to quote. And if you start insurance they won’t ask for your social security number at all so you can keep your confidential personal information private. If you need a bond card, Active Insurance Agency has them too.

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