What happens if you are injured in a car accident, but the at-fault driver doesn’t have enough insurance to cover your losses? Your own auto insurance policy pays — to the limit of the policy.
In Texas, a certain amount of uninsured/underinsured (UM/UIM) coverage is included in your auto insurance policy. If you don’t want the coverage, you have to tell the insurance company in writing. Unfortunately, most people don’t carry more UM/UIM coverage than is required.
That could leave you without the money you need to cover your injuries and property damage. You could sue the other driver personally, but many people without sufficient insurance may not have the cash available to cover you.
How likely is it that an uninsured or underinsured driver could hit you? According to the Insurance Information Institute, approximately 14.1% of Texas drivers are completely uninsured, even though at least $30,000 of liability coverage (up to $60,000 per accident) and $25,000 in property damage coverage is mandatory for drivers in this state.
What is and isn’t covered by my existing auto insurance?
There are eight basic types of auto insurance coverage in Texas. If you are in a crash with an uninsured or underinsured driver, you are covered up to the limit of your UM/UIM policy. Before that kicks in, according to the Texas Department of Insurance, your policy’s collision coverage can be tapped to pay for the damage to your car. And, your ordinary health insurance should pay for the treatment of your injuries.
Medical payments coverage can be used to pay for your and your passengers’ medical bills. Personal injury protection (PIP) coverage also pays for medical bills, but it can be used to cover certain nonmedical costs and lost wages.
However, you need enough UM/UIM insurance to cover you if you can’t work for a long period of time or if you need long-term care. UM/UIM policies can also cover pain and suffering.
Why should I pay extra to cover an uninsured or underinsured driver?
It may feel infuriating that you need to obtain coverage for this situation. But even if the at-fault driver does carry the minimum in liability coverage, that $30,000, or even $60,000, may not go very far. If you have an expensive car, it might not be enough. If you were seriously injured, $60,000 might only cover part of your immediate medical bills.
To protect yourself against another driver’s lack of insurance, you probably need to increase your PIP insurance and your UM/UIM insurance. Make sure you get the treatment and repairs you need, even if you end up needing long-term care or cannot work.