This article will teach you what you need to know about Uninsured Motorist Property Damage (UMPD), and why it may be a missing part of your auto insurance coverage. By doing a simple search on the Internet, you can find tons of articles relating to uninsured motorist coverage for auto insurance.
However, the vast majority of the articles only focus on uninsured motorist bodily injury (UMBI), which is only a part of uninsured motorist coverage. Often overlooked and unmentioned is the uninsured motorist property damage (UMPD) part of coverage. For those of you who only carry liability coverage, this is something you need to look into.
What is uninsured motorist property damage coverage?
The best way to explain how UMPD works is to give an illustration:
Let's say you're driving through an intersection and someone runs a red light and hits your car. It is clearly their fault, and there is significant damage to your vehicle. Normally, that driver's liability coverage will pay for the damages to your car up to the value of the vehicle.
But what happens if the driver does not carry liability coverage as he/she is required to by law? That is where uninsured motorist property damage (UMPD) kicks in. UMPD will pay for the damage to your vehicle up to the vehicle's value or level of UMPD coverage, whichever is less. UMPD usually carries a $250-300 deductible with most auto insurance companies.
Who does UMPD coverage apply to?
For the states in my territory, this article mostly pertains to Ohio and Indiana drivers that carry only liability coverage on their vehicle. For Virginia and West Virginia drivers, UMPD coverage is already required. So as long as you're legally insured you already have this coverage. For the states of Michigan and Pennsylvania, there are no laws on the books. And thus very few, if any companies offer UMPD coverage.
Who does UMPD coverage NOT apply to?
Anyone who has collision coverage (a.k.a. "full coverage"). UMPD coverage is already included as part of collision coverage. This makes UMPD coverage null and void once you have collision coverage.
Are there any loopholes regarding uninsured motorist property damage coverage?
Yes. There is one downside that uninsured motors property damage coverage does NOT cover. And that is hit-and-run drivers who cannot be identified. In order to be covered by an unidentified hit-and-run driver, you need to be carrying collision coverage.
How much does UMPD coverage cost?
That's the good news! UMPD coverage is very cheap. That's why for any driver that only carries liability coverage on their auto insurance policy, I highly recommend it. How cheap? For most vehicles it is only about 1 to 2 dollars extra per month, per vehicle on an average auto insurance policy. I've seen it as low as $0.50 a month but I rarely ever see it go in any higher than 5 dollars a month.
Should I select higher levels of UMPD than the minimum that is offered?
NO! I believe you should only take the minimum amount of coverage offered on UMPD.
The reason: Because the lowest coverage amount an auto insurance company will offer you for uninsured motorist property damage coverage is $7500 (some companies have UMPD minimums ranging from 10-25 thousand).
Any vehicle worth more than $7500 should be carrying collision coverage. It's not worth it to risk a vehicle of higher value with only uninsured motorist property damage coverage. Accidents happen. UMPD will not cover you if you are at fault in the accident. Only collision coverage will do that.
Let me make one thing clear: Uninsured Motorist Property Damage should by no means be considered a substitute for Collision coverage:
With that being said, I realize that many older vehicles have depreciated in value to where having collision coverage isn't worth the premium. These are the vehicles that should have UMPD coverage! Even with the loopholes noted above, they are still worth having because of the price. And because of the fact that 1 in every 6 (higher in some states) drivers on the road are uninsured.
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In many ways, snowmobile insurance uses the same terminology that auto insurance does. But because of that, many people make the mistake of using the same mentality when choosing snowmobile insurance coverage as if they were purchasing auto insurance. That is a huge mistake! You can get much better snowmobile insurance coverage for about the same premium, if you only know a few things.
There are three key things regarding snowmobile insurance that you need to be aware of before buying a snomobile insurance policy:
1. Most snowmobile insurance policies that are attached to a homeowners policy lack some very important coverages compared to what is offered with an exclusive stand alone snowmobile insurance policy.
This is by far the most important thing. Make sure your policy doesn't have silly restrictions as to when, where and how you use your snowmobile. These types of restrictions are common with snowmibile insurance that is attached to a homeowners policy:
There are some exceptions. A few homeowners insurance companies offer very good attached snowmobile insurance coverage. But nine times out of ten, a stand alone policy written exclusively for snowmobiles offer better coverage than policies attached to a homeowners policy.
2. Additional coverages that any good snowmobile insurance company should offer.
Aside from the basic components of a snowmobile insurance policy, there are additional coverages offered on any good snowmobile insurance policy. Not all of the following will apply to you. But many of these additional coverages are valuable and inexpensive. It's something that only takes a couple minutes to go over with your agent. Don't overlook these. Some you may find very important:
1. GAP / Total Loss coverage.
Like automobiles, brand new sleds depreciate once you buy them. So for those who have recently bought new sleds, adding this coverage is a no brainer! A good snowmobile insurance company will offer one or the other, and both are much better than insuring a new sled on an "actual cash value" basis. Again, if you have a new (or nearly new) sled, this is a must have for the little extra cost.
2. Accessory coverage.
For those who have comprehensive and collision coverage on their sled, accessory coverage is also available. A certain amount of coverage ($3000) is usually included for free with the option of buying additional coverage.
3. Trailer coverage.
Roughly two thirds of all sleds are transported by a trailer. But many people don't think about trailer coverage until it's too late.
4. Roadside Assistance.
Sleds break down sometimes. Coverage for roadside assistance is usually very cheap. But what is covered varies from one company to the next. But it doesn't hurt to ask about what is covered and for how much. Decide for yourself whether or not it is worth it.
3. Higher levels of coverage for snowmobile insurance can cost much less dollar for dollar than what an auto insurance policy does. So make sure to inquire on higher limits of coverage.
The biggest difference is that a snowmobile is an off-road vehicle. And because of that, there is much less risk of a snowmobile accident than there is an auto accident. However, most sled owners don't take advantage of that when selecting their levels of coverage. By simply inquiring what the next higher level of coverage would cost, chances are that many of those increases are worth the extra money.
For example: In many cases, a snowmobile policy can increase many of the following for only a few bucks extra per year:
That's right! for about $5-10 extra a year, many of you can upgrade to any of the above coverages. So be sure to ask your agent about it before you buy a snowmobile policy.
As an agent, I've noticed just how unfamiliar people are with snowmobile insurance when I'm running a snowmobile insurance quote for them. I get a lot of blank stares in person, or dead silence on the phone. My advice: Don't be afraid to ask your agent questions. That's what we're here for.
Simply having an understanding of everything mentioned above arms you with the right questions to ask.
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Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..