The Importance of Uninsured and Underinsured Motorist and Medical Payments Auto Insurance Coverage

Exchanging info after a car accidentWhether signing up for new auto insurance, adding a new vehicle to your policy, or renewing an existing policy of auto insurance, consider two coverage options that can help you if you are in a car accident: Uninsured and Underinsured Motorist Coverage and Adequate Medical Payments Auto Insurance Coverage.

These policies can add extra protection for you from uninsured drivers, and can help you if you do not have health insurance or have high deductibles for their health insurance.

Let’s look at these individually, starting with what’s required in Illinois.

Minimum Liability Insurance Requirements in Illinois

Illinois law provides that no auto policy arising out of the ownership, maintenance or use of a motor vehicle that is either registered in Illinois or principally garaged in Illinois vehicle can be renewed, delivered or issued unless uninsured and underinsured motorist coverage is included in an amount equal to the insured’s liability limits, unless specifically rejected by the insured, 215 ILCS 5/143a-2 (2018 State Bar Edition).

At the scene of a car crashDespite the high cost of medical care and vehicle replacement or repairs, the minimum liability insurance requirements in Illinois are only $25,000 as a result of injury or death to one person, $50,000 as a result of injury or death to two or more persons, and $20,000 as a result of damage or destruction of property in any one motor vehicle crash, 625 ILCS 5/7-203 (2018 State Bar Edition). Obviously, these minimum insurance requirements can be woefully inadequate even for moderate collisions.  Uninsured and underinsured motorist coverage is usually not all that expensive to add to your policy and is worth the peace of mind it brings.

One of the most important things you can do for you and your family is to purchase adequate uninsured and underinsured motorist coverage.

The Cost of Car Accidents

Experience has shown that medical care required as a result of a motor vehicle crash can result in medical bills between $20,000 and $50,000 or even more per person for just one day in a hospital.

In addition to medical care, property damage can be very significant in a motor vehicle crash. Motor vehicles having a value between $50,000 to $80,000, and even more, are now common on our highways.

Why You Need Uninsured Motorist Coverage

When purchasing auto insurance, you may just be looking to comply with minimum insurance requirements and protect you and your family from financial harm that could result if you are the at-fault driver in a motor vehicle crash. But that may not be enough.

Unfortunately, we often see this scenario: the at-fault driver is either uninsured or underinsured. The not-at-fault victim of the crash doesn’t have additional uninsured and underinsured motorist coverage on their own policy. He or she sustained an injury, expense, and/or property damage in a crash.

It is always disheartening to see this, because the typical uninsured or underinsured driver often does not possess sufficient assets to pay a substantial claim even if a judgment is obtained against them.

Doctors and hospitals do not render care or base their billing statements on who is at fault in an auto crash. They will demand, and are entitled to, reasonable compensation for their services if they treat you, regardless of who may ultimately be determined to be at-fault for the crash.

How To Protect Yourself From Uninsured Drivers

One way you can protect yourself and your family from financial hardship caused by an uninsured or underinsured driver is to insure yourself and your family to the same extent and with the same coverage limits for uninsured motorist and underinsured motorist coverage as you insure against liability to other persons who you may injure or cause property damage as a result of your driving errors.

Ask your insurance agent about adding this to your policy if your existing insurance policy includes uninsured or underinsured coverage in an amount equal to your liability coverage (you have to specifically request such coverage).

One of the most important things you can do for you and your family is to make sure your auto insurance covers uninsured and underinsured motorists.

Filing a claimWhat is Medical Payments Coverage?

Another coverage that can be very important, especially for those without health insurance or those with high deductible health insurance plans is “Medical Payments” coverage.

This is somewhat unusual coverage. Unlike “liability” coverage or “uninsured motorist” coverage or “underinsured motorist” coverage, medical payments coverage pays for the reasonable medical expenses for those in your vehicle who are injured in a crash, up to the limit of coverage you have purchased, regardless of who was at fault.

Medical payments coverage pays for the reasonable medical expenses for those in your vehicle who are injured in a crash up to the limit of coverage you have purchased regardless of who was at fault.

Why You May Need Medical Payments Coverage

Often, liability for a crash can be disputed even in rather obvious rear-end or intoxicated driver type collisions.

Since the insurance company for the driver who appears to be at-fault has no obligation to pay anything unless and until there is either an agreed settlement or a final judgment, it can be many months or perhaps even years before payment is made on a liability or an uninsured or underinsured motorist policy.

This is where the “pay regardless of fault” aspect of “Medical Payments” coverage can keep your credit rating intact and the debt collectors at bay should liability of the crash event be disputed or contested.

Talk to Your Insurance Agent

In order to determine the appropriate amount of liability, uninsured, underinsured and medical pay coverage for you and your family, we suggest that you discuss the benefits and costs with a trusted insurance agent.