What is uninsured motorist coverage?

The term "uninsured motorist coverage" is one of those rare cases in the insurance industry where the name really does say it all. This coverage is usually bundled into your basic automobile insurance coverage and it provides protection against accidents where the at-fault driver is a motorist who does not have valid automobile liability coverage. This simply means a motorist who doesn't have insurance in force or has somehow not validated their insurance coverage. The uninsured motorist deductible on a policy is almost always the same as the collision deductible (learn about The Pros and Cons of Increasing Your Auto Deductible).

This coverage might seem like a waste of money. After all, everyone carries insurance, right? But the risk is greater than you might realize. Drivers can become "uninsured" in a variety of ways. Some of the most common ones are:

• Simply not carrying insurance, or accidentally letting it lapse on renewal
• The driver was not authorized to drive the vehicle (find out whether your insurance company will pay a claim if someone else is driving your car)
• The accident was caused by an intentional act of violence (such as road rage)
• The driver violated some part of the Motor Vehicle Act (by driving under the influence, perhaps)
• And one of the most common reasons for driving uninsured is that the vehicle was being used for a different purpose other than the one they insured it for, as is the case when someone uses a vehicle insured for private use for business purposes. This one is more common than you might think because even driving to work can be considered a "work-related" use. Most pleasure use vehicles are allowed a few days per month of work-related use but many people inadvertently exceed that limit (learn more about whether your car is still considered a personal passenger vehicle if you sometimes use it for work).

With all these ways of becoming uninsured, don't be surprised if your uninsured motorist coverage has to kick in if you ever get into an accident.

We should also discuss underinsured motorist protection and unidentified motorist protection. These two are usually sold alongside uninsured motorist coverage as part of your basic coverage (depending on your jurisdiction). As you might have guessed, under-insured motorist coverage will protect you against drivers who have liability insure but don't carry enough of it to adequately compensate you for damages, and unidentified motorist protection provides coverage against hit-and-run incidents in which the other party cannot be identified and located.