If you look closely at your auto insurance coverage, you may be surprised that you have uninsured and underinsured motorist coverage. But how do they work? Are they required, or can you have either of them removed from your policy to save money? Read on for more information. Some of the answers may surprise you.  

What Is Uninsured Auto Insurance Coverage?

There are only two states in the US that do not require auto insurance coverage. These states are New Hampshire and Virginia. But while most states require some form of auto insurance, this does not guarantee that all drivers on the road have it. Estimations show that over 12% of drivers are uninsured, and in some states, such as Mississippi and Michigan, this number rises to more than 25%. 

Uninsured insurance covers you when you are involved in an accident with an at-fault driver who does not have auto insurance coverage. Most states mandate this coverage as a part of your policy. It can help pay for costs associated with any injuries to you and your passengers and expenses related to any damages to your vehicle. 

What Is Underinsured Motorist Coverage?

In some cases, the other driver may have an auto insurance policy but not enough insurance to cover the cost associated with an accident. Your underinsured auto insurance coverage would kick in and pay the difference between what the at-fault driver's policy pays and the balance.

The minimum insurance coverage varies by state. Underinsured motorist coverage is very valuable in states that have low minimum requirements. These numbers represent the amount of bodily injury coverage per person/bodily injury coverage per accident/property damage liability. 

For example, California only requires 15/30/5, while Maine requires 50/100/25. The low requirement in California means if you are involved in an accident in California with an at-fault driver who only has minimum coverage, they will only have $15,000 worth of coverage for your medical bills. With the high cost of medical care, any injury resulting in a hospital stay will usually exceed this. If multiple passengers are in your vehicle, you will have to split the $30,000 worth of bodily injury per accident the person is carrying. This scenario is when you would file a claim against your underinsured coverage.

Do You Have To Have Uninsured Or Underinsured Auto Insurance Coverage?

While most states require that you have uninsured and underinsured bodily injury coverage as a part of your policy, uninsured property damage is often optional. But is this a coverage you want to remove with the high cost of repairing or replacing your vehicle and other property today?

Contact a local insurance company to learn more about auto insurance coverage.