Question: I live in Texas and uninsured underinsured motorist coverage is not required. What is the difference between uninsured underinsured motorist and collision coverage? If I did not have UIM/UM and was involved in an accident with someone who did not have insurance and was at fault, can’t I use collision to cover the expenses? If this is the case, if you have collision on your policy than why do you need UIM/UM?
Answer: In Texas the uninsured motorist / underinsured motorist (UM/UIM) that is required to be offered to you by auto insurers can be for bodily injury and property damage. While it must be offered, you are not required to purchase these coverages. If you do reject it, it must be in writing.
These UM/UIM coverages pay your expenses from an accident caused by an uninsured motorist or if the other driver did not have enough insurance to cover your bills, up to your policy’s dollar limits. It also pays for accidents caused by a hit-and-run driver if you reported the accident promptly to the police.
Bodily injury UM/UIM pays without deductibles for medical bills, lost wages, pain and suffering, disfigurement, and permanent or partial disability.
Property damage UM/UIM pays for auto repairs, a rental car, and damage to items carried in your car. There is an automatic $250 deductible. This means you must pay up to $250 of the repairs yourself.
A UM/UIM policy would cover you, your family members, passengers in your car, and others driving your car with your permission.
Collision insurance covers the cost of repairing or replacing your car after an accident, regardless of who was driving or who was at fault. Payment is limited to your car’s actual cash value, minus your deductible. Actual cash value is the market value of a car like yours before it was damaged and is paid if your car is declared to be a total loss.
You are correct that if you have collision coverage, you may not need UM/UIM property damage since you could put a claim in through your collision coverage if an uninsured motorist hit your vehicle. This type of policy might be of use if the other party, who is at fault, is underinsured. If the other driver’s policy would not cover all of your auto repairs you could file a claim against your UM/UIM coverage for the difference (minus your deductible) between the damage to your car and what the other driver’s policy will pay.
There is also the bodily injury portion to UM/UIM policy. If you were injured in an accident and the other driver’s insurance would not cover all your medical bills, you could file a claim against your uninsured/underinsured motorists (UM/UIM) coverage.
If you have collision coverage and your PIP or your own health insurance that would pay medical bills if you were in an accident with an uninsured or underinsured motorist then you may not need UM/UIM coverages. It is a personal choice dependent upon your own situation and what auto insurance coverages you already have beyond the required TX liability insurance.