Car Insurance Coverage: Uninsured Motorist & Deductibles

Last week, I wrote about the one required coverage on any Texas car insurance policy. It is liability coverage (see I’m going to continue on the theme of car insurance coverage this week as we look at two more coverage types which are Uninsured Motorist and deductibles.

UM/UIM: Uninsured motorist coverage is usually referenced on a policy or quote as UM/UIM which stands for uninsured motorist / under insured motorist. This coverage is designed to protect you from other drivers; ones with no car insurance or not enough car insurance coverage.

Specifically, if you’re hit by someone who doesn’t have car insurance, this coverage pays to repair or total your car based on your policy’s amount of coverage or the actual cash value of your car. It also pays if the person who hits you doesn’t have enough car insurance coverage to fully pay for repairs or the totaled value of your vehicle.

Like liability coverage, there are two components to uninsured motorist coverage, medical or bodily injury coverage and property damage. The bodily injury coverage helps defray the cost of medical care for you and anyone riding in the car with you. The property damage portion is what’s used to repair or pay for the totaled value of your car.

There are two benefits to carrying UM/UIM coverage. The first one is that it reduces your out of pocket deductible to $250 versus the collision deductible you may carry. In addition, you are providing an additional layer of medical coverage for you and anyone riding with you which can be very helpful when you consider many medical plans have high deductibles and co-pays.

Deductibles: Most people look at deductibles as the amount of money they will pay out of pocket before their car insurance policy pays toward repairing or totaling their vehicle. That is correct in one sense. Having a deductible on your policy also indicates you have this coverage. Aside from the uninsured motorist deductible, the other two types of deductibles are collision and comprehensive.

The collision deductible applies to all types of collisions such as rear-ending another car, running into a fence, or even hitting a pedestrian. These are usually at fault accidents when you hit another vehicle or object. It may also be applied in a not at fault accident where someone hit your vehicle such as when it’s parked at the grocery store, mall or elsewhere.

The comprehensive deductible, which is also referred to as “other than collision”, addresses other types of claims such as a rock hitting your windshield, a tree falling on your car, hail damage, someone vandalizing your car, a flood, or if your vehicle catches on fire. It even applies when you hit an animal, such as a deer, while driving.

One note to remember is that both UM/UIM and policy deductibles are considered optional coverage. Strictly speaking, anything other than liability coverage is truly an option on a Texas car insurance policy. You don’t have to have them. If they aren’t on your policy, then you don’t have that coverage.

What do you think? Share your questions, comments, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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