Why Uninsured Motorist Bodily Injury Liability is a Must-Have Provision for Auto Insurance Policies

Posted on December 11, 2013 by Aman Shah

As a personal injury attorney, too often I have come across clients who had decided against spending the extra few dollars per month on uninsured/underinsured motorist bodily injury (UMBI) liability coverage in their auto insurance policies. Two words: bad decision. Why? Well, in order to get to the "Why" portion of the analysis, the first step is to define exactly what "UMBI" really means.

Uninsured/Underinsured motorist bodily injury liability coverage is an option in all California auto insurance policies, providing the insured and his/her spouse, resident relatives, and any passengers in the vehicle with protection against bodily injuries suffered in an auto accident involving an uninsured driver, underinsured driver, or hit-and-run driver. In this scenario, the insured's auto insurance provider would supply coverage for bodily injuries to the vehicle's occupants up to the limits of liability. By law, insurance agents must offer UMBI coverage to a potential insured; but, again, the coverage is optional, not mandatory. Thus, many insureds decide against the added cost of what they wrongly perceive to be a superfluous provision.

So, let's say, for instance, you are involved in a serious auto accident and are not at fault. Your injuries are quite severe, with multiple broken bones and over $50,000 and counting in medical bills. Unfortunately, the at-fault driver happens to be uninsured and in a very low income bracket. You had decided months back, when negotiating your new auto policy terms, to forego the UMBI coverage because it would add an extra $50 per year to your premiums. Now, as the medical bills accumulate, you come to the realization that you will not receive any reimbursement for your accident-related medical bills or pain and suffering because: a.) the at-fault driver was uninsured, b.) the at-fault driver has very few personal assets to recover, and c.) you had decided against UMBI coverage. For a savings of approximately $50, you have lost out on a potential recovery of tens, maybe hundreds, of thousands of dollars for your injuries. This scenario happens more frequently than you might think, particularly in a state like California, where driving is culturally ingrained and, according to a 2013 California Department of Insurance report, more than 16% of drivers are uninsured.

Bottom Line: The potential benefits of UMBI coverage far outweigh the costs, so strongly consider adding this provision to your auto insurance policy next time around.