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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Dan Lyles is an Independent Insurance Agent serving Ohio, Indiana, Michigan, Pennsylvania, Virginia and West Virginia..