Did you know that 20% of Texas’ drivers have no car insurance at all, per the Texas DOT? And that could easily cost you tens of thousands!
Also, you can safely estimate that around 50% (roughly 8.5 million) don’t carry enough insurance to cover the damages caused by even a moderate wreck.
This means that 10 out of 50 cars sitting with you on the highway during rush hour don’t have any car insurance. And 25 out of 50 likely won’t have the necessary insurance should they cause anything more than a minor accident.
On top of this, per data discussed at Rice University’s Urban Edge, Texas drivers are tied for the worst in the nation. That’s because they cause the highest fatality rate per 100 million miles traveled. Texas’ motorists also have high rates of traffic law violations, careless driving, drunk driving, and speeding.
So, if you find yourself in a car accident, you have a good chance of not being able to recover the financial damages you should from the at-fault driver. And that means you’ll have to cover the medical bills, lost wages, property damage, and other costs from someone else’s accident out of your own pocket (unless you have enough UI / UIM coverage).
The minimum 30/60/25 auto insurance required by Texas’ law ($30,000 liability per person, up to $60,000 for the whole accident, and $25,000 for property damage) won’t be enough if a hospital stay is required. Just visiting the emergency room costs thousands of dollars. And that’s before any tests are even performed!
Additionally, the minimum liability coverage certainly won’t be enough if more than two vehicles get involved in the accident.
With new car prices at an all-time high, and the cost of a new car approaching $48,000 (per Money.com), $25,000 has a good chance of not covering the entire cost of a new car either.
At Mullen & Mullen, we’ve seen hundreds of clients eat tens of thousands in expenses because other drivers don’t carry enough insurance and don’t have any assets to go after to cover the cost of the damages they cause.
We don’t want you to be the next one having to pay tens of thousands of dollars that you shouldn’t have to!
How Can You Protect Yourself from Uninsured and Underinsured Drivers?
Fortunately, you can easily protect yourself from uninsured and underinsured motorists for a reasonable cost.
Simply up your liability coverage and UI (uninsured motorist) / UIM (underinsured motorist) coverage to 250/500/100 ($250,000 bodily injury per person / $500,000 total for all persons / $100,000 for property damage).
Then, purchase an umbrella insurance policy with a value of at least $1 million.
UI / UIM costs just a few extra dollars per month. And umbrella insurance costs you just a few hundred dollars per year. It’s all reasonably affordable and completely protects you from uninsured and underinsured motorists. And if you bundle these insurances with the same company, they may offer you a nice discount too.
What’s the Difference Between Uninsured and Underinsured Motorist Coverage?
UM (uninsured motorist) coverage protects you from drivers who don’t carry any auto insurance at all (even though Texas law requires it). UIM (underinsured motorist) coverage protects against at-fault drivers who don’t have enough insurance to cover the damage they cause.
Recall that, because Texas law requires such low policy limits of 30/60/25, there’s a good chance that an at-fault driver doesn’t have enough insurance to cover the damage they cause you because they choose to carry just the legally required minimum.
How Does Uninsured / Underinsured Motorist Coverage Work?
Both coverages protect you when an at-fault driver doesn’t have enough insurance to cover the damage they cause.
An example will help demonstrate the point. Assume that another driver rear-ends you. Typically, you would file a claim with their insurer. However, let’s say they don’t have any insurance. That’s where uninsured (UM) / underinsured (UIM) motorist coverage comes in. Instead of filing a claim with the at-fault party’s insurer, you file a claim with your own insurer.
Technically, Texas law does allow you to go after the personal assets of an at-fault party if they don’t have the necessary car insurance to pay for their damages. However, they may not have sufficient personal assets to go after. And it can also be difficult to figure out what assets they even have available. Finally, it’s also a difficult process to go through court and seize their assets. In most cases, this simply isn’t a viable option.
It could also happen that the other driver simply leaves the accident scene before you can write down their license plate number. And again, this is where UI / UIM comes to the rescue. Just like before, you simply file a claim with your insurance company, and your UI / UIM coverage kicks in and takes care of you.
How Much Does UI / UIM Cost?
Fortunately, UI / UIM coverage is quite affordable. For an average driver with a clean driving history, UI bodily injury and property damage insurance costs around $100 per month. UIM bodily injury / property damage costs significantly less.
Costs can vary somewhat based on your driving record also. The more violations and accidents you have in the past 3-5 years, the more these coverages cost.
What Does UM / UIM Bodily Injury Cover?
Bodily injury coverage takes care of the medical expenses related to your car accident. UMBI / UIMBI, as they are called, covers these expenses up to your chosen policy limits.
Typically, insurance companies state this as 30/60. This simply means the policy’s limits are $30,000 per person, and $60,000 per accident. Any amount above that will not be paid for by your insurer.
Understand that “per person” refers to the max coverage for any single person involved in the accident. In this case, that amount would be $30,000 (the minimum required by Texas law).
“Per accident” simply means that will be the total amount paid for bodily injuries for the entire accident. So, if you have other injured family members in your vehicle at the time of your accident, the at-fault driver’s insurance policy will cover up to $60,000 in bodily injuries for the total accident (assuming the other driver has the legally required minimum 30/60 liability insurance required by Texas law).
As noted earlier, 30/60 is way too low to cover the injuries caused in many Texas car accidents. If you have to go to the hospital, or if you get involved in a wreck with more than one other car, it’s easy to exceed the coverage provided by a 30/60 UMBI / UIMBI policy.
That’s why we’re emphasizing that you should carry 250/500. $250,000 per person and $500,000 per accident gives you enough coverage in most cases. Combine that with an affordable $1 million in umbrella insurance, and you have an impeccable plan for protecting yourself from the many other negligent drivers in Texas.
What Does UM / UIM Property Damage Cover?
This coverage protects your vehicle when another at-fault driver causes damage to it.
Many drivers, unfortunately, make the mistake of not using this coverage because they already have collision coverage.
However, an uninsured motorist property damage (UMPD) claim holds a couple key advantages over a collision claim:
- Rate increases after a UMPD claim are much lower
- You get protection against a hit-and-run accident
To put this in perspective, look at what would happen if you were hit by an uninsured motorist on your way home from work. Assume that your vehicle was completely totaled.
Without UMPD, you’d have to file a collision claim. This type of claim sees you as at-fault for your accident (even though technically that wasn’t the case). Not only will your premiums increase substantially…they’ll stay that way for another 3-5 years!
And all that, even though the accident was someone else’s fault.
Now, take the same scenario, but let’s assume you have UMPD coverage instead. The typical UMPD claim raises your rates by just 10% of the amount that a collision claim does. So, that’s a good chunk of cash back in your pocket.
But let’s look at another problem. The Texas state minimum liability coverage for property damage is $25,000. The average cost of a new car runs around $48,000. If the other driver carries just the minimum liability coverage, and they total your car, you must come up with the additional $23,000 required for a new car.
And again, this is where UMPD comes in. If you have the recommended $100,000 in UMPD coverage, you’ll be just fine. If you have a car worth more than $100,000, then the recommended umbrella insurance covers you.
A Clever Way to Increase Your Insurance Coverage: Stacked Coverage
Have you ever heard of “stacking” your insurance coverage?
This means that, if you have two vehicles, for example, you can then combine the insurance to count against one accident that you have.
For example, say those two vehicles each have $10,000 of UMBI (uninsured motorist bodily injury coverage). If you get in an accident with one, you can apply all $20,000 of UMBI available toward that one accident (even though only one vehicle was involved in the accident).
Stacking coverage does cost a little more than conventional coverage. Make sure you talk to your insurer, so you understand exactly how this works with them.
How Do You File an Uninsured Motorist Claim?
You file an uninsured motorist claim just like you would any other auto insurance claim. Just follow these steps:
- Report the accident to your insurer with as much detail as possible
- Make sure the police file a report. File one yourself if necessary.
- Give your insurance adjuster additional info and images as needed.
- Accept the insurer’s offer if you think it’s fair.
- If you have any doubts about the offer, talk to a car accident lawyer.
Protect Yourself with 250/500/100 UM / UIM and a $1 Million Umbrella Insurance Policy
Just like we said near the beginning of this article and a few times throughout, an easy and affordable way to protect yourself is to add 250/500/100 UM / UIM to your auto insurance policy and then get a $1 million umbrella insurance policy.
It gives you peace of mind in a state with a high rate of auto accidents!
Frequently Asked Questions
Does Texas require UM / UIM coverage?
No. Even though the minimum auto insurance liability limits are set absurdly low, the State does not require UM / UIM coverage.
We simply strongly recommend it, so you don’t find yourself having to pay tens of thousands in out-of-pocket expenses.
Should you get UM / UIM coverage?
Absolutely! It ends up costing you much less than collision coverage. And it protects you from all the other drivers in Texas who either don’t have any auto insurance at all or who don’t have enough to cover the damage they cause.
The more expensive the car you own, the more UM / UIM coverage makes sense. That’s because the minimum property damage we recommend you carry in your UM / UIM policy is $100,000. That should easily cover the cost of most new vehicles.
Additionally, the $250,000 per person / $500,000 per accident of bodily injury coverage will take care of you in the vast majority cases. We also recommend a $1 million dollar umbrella insurance policy to cover you in extreme cases where 250/500 bodily injury coverage may not be enough.
So, yes, you should get UM / UIM coverage. It’s simply the wisest thing to do in a state with a high rate of auto accidents and uninsured drivers.
Should you carry collision and UI / UIM coverage?
Maybe. This decision falls on your shoulders. The benefit of collision insurance is that it covers more situations than UI / UIM.
UI / UIM literally covers accidents caused by uninsured or underinsured motorists…and that’s it.
Collision insurance covers all the situations that UI / UIM covers and any damage to your car resulting from an object or another car, or any damage that results from your car flipping over.
While you do get expanded coverage, collision claims are seen as your fault (even if the situation truly wasn’t your fault!). That means a collision claim will increase your insurance premium for roughly another 3-5 years, even if an uninsured or underinsured motorist caused your accident!
Typically, collision coverage is used for high-value, financed, or leased vehicles.
The bottom line is that while you get more situations covered, the increased coverage comes with a higher cost. You have to decide whether or not the cost of expanded coverage makes sense for your vehicle and budget.
Safer America recently published its article on car accident statistics for 2022. Just how safe is it (or is it not) to drive in the United States? Learn more here.
Shane V. Mullen is an attorney licensed by the State of Texas for the general practice of law, and the Managing Partner at Mullen & Mullen Law Firm in Dallas, TX. His firm focuses exclusively on personal injury law and has been in business for 40 years. Before becoming a lawyer, Shane worked for his father as an accident injury claims investigator.