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UM vs. UIM…..What’s That?

Uninsured Motorist Coverage (UM) vs. Underinsured Motorist Coverage (UIM)

Car insurance seems simple.  You need coverage to drive your car.  You need to protect yourself if you cause a car accident.  The type of coverage that most people have is liability only or comprehensive coverage and its really the only thing people think about regarding car insurance.  There is so much more.

First, both Kansas and Missouri require you to carry what’s called Uninsured Motorist Coverage or UM coverage.  This is used in the event that the person who caused your accident isn’t insured.  Shocker, there are those folks on the road who don’t have insurance.  Strange huh?   The minimum coverage required by the law is $25,000 for each person or $50,000 total for all involved in a single accident.  That’s not a lot of coverage…considering one visit to the ER as a trauma can be around $40,000.  The take away being; insist on a large uninsured coverage amount.  Its only a few bucks more a month and it will really give you comfort in the event you are injured by someone who does not have insurance.

The other form of coverage you can get is called Underinsured Motorist Coverage or UIM.  This is optional but it really shouldn’t be.  This is used if the person who caused the accident doesn’t have enough insurance to cover your injuries.  For example, you have $100,000 in medical bills but the other driver only has $25,000 in available coverage.  After getting the full policy from the at-fault driver, you still have $75,000 in damages, that’s when UIM coverage can kick in.

But here is where things gets tricky.  The UIM coverage you have typically is off-set by what the other driver paid out.  For example, you have $100,000 in medical bills and the other driver’s insurance pays off $25,000 leaving you with $75,000 in damages.  You have minimal underinsured (UIM) coverage of $25,000.  The $25,000 that was paid by the other driver is subtracted from what you have in coverage leaving you with zero.  Take away…have more than the minimums required.

Please note there is a difference between Kansas and Missouri regarding insurance policies.  Missouri has two separate line items for UM and UIM.  In Kansas, they are on the same line, thus, what you have in UM, you also have in UIM.

For more information about this check out these sites:

https://wallethub.com/edu/ci/uninsured-motorist-coverage/9647

https://www.insurance.com/auto-insurance/coverage/uninsured-underinsured-motorist-coverage.html