What Is Uninsured Motorist Insurance?

State insurance laws vary, but they all generally require motorists to carry some amount of liability insurance in order to operate a vehicle. Unfortunately, many drivers do not maintain insurance coverage, often for financial reasons. Uninsured-motorist insurance is one method of protecting drivers against the financial consequences of being in an accident with an uninsured motorist.

Significance

According to the Insurance Information Institute, an estimated 14 percent of drivers in the United States are uninsured.

Function

Uninsured-motorist insurance provides financial compensation if you are involved in an accident with an at-fault driver who has no liability coverage, or when the accident is a hit-and-run.

Features

Uninsured-motorist insurance generally covers the policyholder, passengers and other named drivers on the policy, according to the USAA Educational Foundation.

Benefits

Uninsured-motorist insurance offers many important benefits, including cover for lost wages, help with medical bills and compensation for pain and suffering.

Considerations

In no-fault states that require drivers to file with their own insurance company, even when the accident was the other driver's fault, uninsured-motorist insurance may still provide compensation in cases of severe injuries under certain conditions.

Resources

• Insurance Information Institute
• The USAA Educational Foundation