There might be a situation where your car collides with another vehicle but it’s the other person’s fault.
What if they don’t have insurance? How will you pay for the replacements and repairs once they’re totaled?
An Uninsured Motorist Property Damage or UMPD coverage can save you from those out-of-pocket costs.
Read on to understand how UMPD works and how it can help you out.
What Is Uninsured Motorist Property Damage Coverage (UMPD)?
Uninsured Motorist Property Damage (UMPD) coverage is car insurance that covers any damage on your vehicle caused by an uninsured driver.
UMPD also covers you if your car is involved in a hit-and-run. Although, in some states, the hit-and-run driver should be identified before you receive any payment.
According to the Insurance Research Council, there’s around one uninsured out of eight drivers nationwide. However, there is a significant difference among different states.
New Jersey has the lowest percentage, around 3.1%, while Mississippi takes the first spot with 29.4% uninsured residents.
But if you have collision coverage, you can stack UMPD with it. Collision insurance pays for damages after you collided with another car or any property, regardless of who’s at fault.
For instance, if you hit a tree or cause an accident, you are to blame. Your collision coverage will cover the damages.
Whereas UMPD only covers you if an uninsured driver is responsible. However, take note that your collision insurance policy does not cover your items.
Another thing that you should know about UMPD is that it has a lower deductible than collision insurance. And based on recent research, the average claim payment for UMPD is around $1805.
Difference Between Uninsured Motorist Bodily Injury and Uninsured Motorist Property Damage
When a collision occurs with an uninsured driver and bodily injuries are involved, your uninsured motorist bodily injury (UMBI) coverage compensates for it. This includes yourself and any passenger in your vehicle.
Also, the limit for UMBI is equal to the limit on your liability coverage.
Other than covering your medical bills, UMBI may cover pain and suffering and lost wages or income. It also covers funeral expenses.
You may be held liable for your medical bills if you do not have UMBI coverage. Other coverages, such as Medical Expenses, Personal Injury Protection, or your own health insurance, allows you to file a claim.
UMPD, on the other hand, concentrates on covering the damage to your car caused by an uninsured driver who is at fault. In addition, the cap is usually set at $3,500.
What Your UMPD Coverage Pays For
Your uninsured motorist property damage can pay for whatever extra costs the other driver can’t pay for. This includes any physical property like residential or public property.
Here is a list of what your UMPD coverage can help you pay for:
- Diminished value of your car after repairs are made
- Damage to your residential property or other property
- Other costs that the uninsured driver can’t cover
For example, your insurance policy covers uninsured motorist property damage for $10,000 with a $200 deductible. An uninsured motorist damaged your car worth $4,000 and ran away.
If you’re in a state where your UMPD covers hit-and-runs, your insurance will pay you $3,800 to repair your vehicle. This will leave you with a $200 deductible to pay.
However, this is just an example of how it works if you have UMPD coverage. Having your UMPD stacked with other policies is a different scenario.
When Do You Need UMPD Coverage?
Uninsured motorist property damage coverage is deemed unnecessary by some states. And some policymakers do not offer it as a substitute for collision insurance.
So, here are instances of when you will need UMPD coverage:
1. If you live in a state where it’s required by law
Car insurance is mandatory in almost every state, but the types and amounts of insurance you need may vary.
Commonly, bodily injury liability insurance is required. But approximately half of the states have uninsured or underinsured motorist coverage as requisite.
The usual charge of UMPD sums up to $25,000 per person and $50,000 per accident. This is the same as the liability coverage ceiling of most states.
Here are eight states that need UMPD coverage on their car insurance:
- Maryland requires $15,000 of UMPD. This secures both uninsured and underinsured drivers, including hit-and-runs, even if the driver isn’t identified.
- New Hampshire will not require you to buy car insurance. But $25,000 of both UMPD and UIMPD is needed if they require it.
- North Carolina requires a UMPD limit of $25,000 with UIMPD if you acquire more than the minimum liability coverage limits.
- South Carolina required a UMPD of $25,000 that covers injury caused by an uninsured driver. The state mandates insurers to offer UIMPD as an option.
- Vermont will require a combination of UMPD and UIMPD amounting to $10,000.
- Virginia will not require you to buy car insurance. But $20,000 of both UMPD and UIMPD is needed if they require it. You must pay a deductible of $200 if the hit-and-run driver can’t be identified.
- Washington, D.C. requires a UMPD of $5,000 per accident.
- West Virginia will require you $25,000 of UMPD. This includes injury caused only by the uninsured driver. The state mandates insurers to offer UIMPD as an option.
2. If you want to be safeguarded from uninsured motorists
UMPD will pay for injury caused to your car by uninsured motorists. Some states also cover damages caused in the crash by underinsured drivers.
In most states, uninsured motorist property damage coverage takes care of the expenses after a hit-and-run. Other states will only pay you if the driver is identified.
The United States has 13% of uninsured drivers. According to the Insurance Information Institute, that percentage rises to almost 30% in some states.
Getting involved in accidents caused by uninsured drivers does not guarantee you free from expenses.
In addition to that, underinsured drivers may not have equal coverage to pay for a much larger scale of injuries and damages.
3. If you have a car that you have on lease
Most leasing and financing companies, like banks and dealerships, necessitate that UMPD coverage is included in your insurance policy.
The lessor will enumerate specific requirements for the car insurance as protection to the leased vehicle. This typically includes the sum of uninsured or underinsured motorist coverage.
UMPD Coverage Limits and Exceptions
Before applying for UMPD coverage, you should first understand the limits and exceptions. Even if you’re only considering it, it’s better to know how much you’re going to pay for.
Limits and Deductibles
The coverage limit for UMPD is always a single number, and it is the maximum amount your coverage can pay for.
Additionally, you can choose specific limits in most states. However, some states limit coverage up to $3,500.
Some states may have lower limits, while some may have higher limits. And some states may offer the actual value of the vehicle.
Your coverage limit is the maximum total payout for any property damaged in an accident. It’s up to you if you want to choose a higher limit.
Your policy will cover you with that limit if an uninsured driver hits you. Usually, some deductibles come with the policy. This may also vary by your policymaker or state.
For example, Virginia offers a UMPD deductible. You can decide to pay in cash.
But in general, UMPD deductibles may range from around $200 to $300.
Exceptions and Restrictions
The Uninsured motorist (UM) coverage may vary from each state. There are UM policies that include UIM.
But, UMPD is not always available. Some states do not offer UMPD and do not consider it as necessary compared to other policies.
Your insurance provider will demand records and billings from all repairs and replacements made due to the accident.
Your policymaker will decline your claim if the charges you provided are unrelated or unnecessary to the accident. If you don’t agree with your insurance provider’s decision, the issue will transfer to binding arbitration.
With UMPD coverage, you won’t have to spend more money on repairs and replacements caused by an uninsured motorist.
It puts your mind at ease that it will back you up on your claims as long as it’s within your policy limit. You just have to understand how it works and see if it’s necessary to stick with your current policy.
Although, if you’re not getting it, make sure that you know which state UMPD is mandated. This is so that you won’t break any laws for not having enough coverage.
If you want to learn more about auto insurances, check out these related articles:
- Factors That Determine the Average Cost of Motorcycle Insurance
- Clearcover Car Insurance Review – Is it Worth Buying?
- The 101 of Car Leasing (Plus the Mistakes You MUST Avoid)
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