These are both coverages that you can buy on your auto insurance policy that would apply if you’re involved in an accident, where you’re not at fault, and the other people either don’t have enough insurance or have no insurance. Another scenario is if you get hit by hit and run, that will also trigger this coverage for you.
I’m going to actually lump those two coverages together, but I’m talking about two different parts of this policy. You need to understand these two different pieces. One, they are typically sewed together in a pair with shared limits. Whatever the limits that you have for uninsured motorist bodily injury per person, are the same limits for your underinsured. There are separate coverages inside of this pair, but just understand that they usually kind of mirror each other. Understand that the uninsured part is going to apply whenever the people that are at fault have no insurance. I mean, they have absolutely no insurance that can apply. The underinsured, the “under” means that they don’t have enough insurance to take care of the medical bills because of an accident that they are at fault. So understand those three different things.
Why do we have this coverage?
This coverage is designed to apply to answer to problems that are prevailing in all of our different states. The first problem is, a lot of people just don’t carry auto insurance. You may say, wait a minute, but I know our state has got laws that require us to have insurance. In order for me to own and operate a car, or truck, I have to have auto insurance and this is true. However, there still are a lot of people in every state that just do not carry auto insurance. This is unfortunately a pretty bad problem, depending on the state that you are in.
The states that we write in are Louisiana, Arkansas, Mississippi, and Texas, and I’ll give you some statistics. The percentage of people that do not have insurance, the lowest percentage of uninsured drivers is actually Louisiana at 13%. That’s a little bit more than one out of every 10 drivers do not have insurance. The highest state is Mississippi, at 24%, as you’re driving down the road, if you’re inside of the state of Mississippi, one out of four cars that you are around have absolutely no insurance. That’s a staggering number. Now in the other two states, Texas is 14% and the state of Arkansas it’s 17%. So understand that those states depending on what state you’re in, that that is how many people have absolutely no insurance at all.
Some people just don’t have enough insurance
The second problem that this is designed to answer is a lot of people just don’t have enough insurance. Each and every one of our states does have a law in place that states that you must have at least this amount of insurance to own and operate a vehicle. Louisiana is the lowest of these at $15,000 and then $30,000. Those two numbers represent different things.
The first number represents how much bodily injury or medical expenses that policy will pay up to the amount per person. The second number is per accident. So think about that with Louisiana. If they have a state minimum policy is only going to pay up to 15,000 per person for medical expenses, and 30,000 for medical expenses per accident is not very much. If you’re involved in an accident where you’re just moderately injured, they’re probably gonna run out of insurance for all of your medical bills or taking care of it. Same thing with the per accident $30,000, if you got more than two people inside that vehicle, they’re gonna run out of insurance really quickly.
We will be discussing a very important aspect of auto insurance coverage: medical payments coverage. We’ll discuss what it covers, how it works, how it differs from other types of insurance coverage, and also the benefits of having this coverage.
Some of the other states are a little bit better
In Mississippi and Arkansas, the number is $25,000 and then hit the top. Texas is the highest at $30,000 and then $60,000, in all of these cases, still, that is just not enough to take care of all those different expenses. If you’re involved in an accident, where you have some sort of an injury, potentially you may have to be rushed to an emergency room. They’re going to do different scans, they’re going to do different X-rays, potentially some CT scans and some other different scans, they’re going to have to do some sort of procedure, you’re going to have some sort of medications while you recover. And then you also are going to have rehabilitation after that.
All of those different expenses are going to add up and there may just not be enough insurance there for an accident that you absolutely had nothing to do with other than the fact that you are a victim in this in that accident. And there’ll be the other person was just didn’t properly plan for an incident such as that.
What if you have health insurance?
And you may say, “I’ve got health insurance, well, wouldn’t that apply?” Well, the answer is, yes, it will. But understand that underneath your health insurance, there are a few different things that you need to consider.
One of them is you’re going to have a deductible. A lot of health plans these days have really high deductibles, $3000, $5000, even $10,000. The second thing is you’re going to have co-payments, and that’s going to be the part that you are responsible for. Before your policies actually pay or that you pay in connection with your health insurance policy. And also, there may be some other limitations that really you need to look into your health policy and talk to whoever the provider is for that coverage for you.
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Beaux Pilgrim, CEO