Uninsured Motorist Coverage: 5 Reasons You Need It Now
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THE BUNDLEBEE BUZZ
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Your El Paso Insurance Expert bundlebeeagency.com |
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El Paso, TX 79936 BLOG #84
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Why Uninsured Motorist Coverage Matters in the Borderland
You can drive carefully, follow the speed limit, and carry strong auto insurance. However, you cannot control whether the person driving next to you has enough insurance.
That risk matters for El Paso and Borderland families. The BundleBee guide estimates that about one in five Texas drivers is uninsured.
If an uninsured driver causes a serious accident, their lack of coverage can quickly become your financial problem.
Therefore, understanding Uninsured Motorist and Underinsured Motorist coverage can be just as important as understanding the liability coverage you carry for other people.
What Is UM/UIM Coverage? — The Direct Answer
Uninsured Motorist, or UM, coverage helps protect you when an at-fault driver has no insurance.
Underinsured Motorist, or UIM, coverage applies when the at-fault driver has insurance, but the available limits are not enough to cover the eligible loss.
In other words, UM addresses a driver with no applicable insurance, while UIM addresses a driver whose available liability limits are too low.
Your actual protection depends on your policy limits, deductibles, exclusions, applicable law, and the circumstances of the claim.
Explanation by BundleBee Insurance Agency · El Paso, TX · Licensed in Texas & New Mexico · 915-591-0075
5 Reasons You Need to Review UM/UIM Coverage Now
Reason #1 — The Other Driver May Have No Insurance
First, not every driver on the road carries insurance.
The BundleBee guide estimates that about 20% of Texas drivers are uninsured. Therefore, even a driver with a strong personal auto policy can still be hit by someone who has no liability insurance.
UM coverage is designed to address that situation, subject to the terms and limits of your policy.
Reason #2 — Minimum Liability Limits May Not Be Enough
Next, having insurance does not necessarily mean a driver has enough insurance for a serious accident.
Medical bills, lost income, and other covered damages can quickly exceed another driver’s available liability limits.
That is where UIM can become important. It is designed to address an eligible shortfall when the at-fault driver’s available coverage is insufficient, subject to your policy.
Reason #3 — Texas Drivers Can Reject UM/UIM
In addition, Texas drivers should confirm whether UM/UIM appears on their policy.
The BundleBee guide explains that Texas insurers offer UM/UIM coverage and that a policyholder can reject it in writing.
Therefore, check your declarations page instead of assuming the coverage is active. If you previously signed a rejection, ask your agent about your current options for adding coverage.
Reason #4 — Multi-Vehicle Coverage Can Work Differently by State
Meanwhile, families with several vehicles should understand how their UM/UIM limits apply.
The BundleBee guide highlights an important Texas–New Mexico difference involving the ability to combine, or stack, limits across insured vehicles.
Because stacking depends on applicable law and policy language, multi-vehicle households should ask exactly how much UM/UIM protection would be available after one accident.
Reason #5 — Borderland Families Drive Across Different Insurance Systems
Finally, El Paso and Las Cruces families regularly cross between Texas and New Mexico.
Although the roads connect the region, insurance requirements and policy rules can differ by state.
As a result, Borderland families should understand the policy they actually carry and how its UM/UIM coverage works before an accident occurs.
UM/UIM Coverage at a Glance
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~20%
Estimated uninsured Texas drivers in the BundleBee guide
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UM
Protection when the at-fault driver has no applicable insurance
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UIM
Protection when available liability insurance is insufficient
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2 States
Texas and New Mexico rules can differ
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Texas vs. New Mexico UM/UIM
The BundleBee guide emphasizes that Borderland families should not assume UM/UIM works exactly the same way in Texas and New Mexico.
TEXASUM/UIM: Offered with Texas auto policies and may be rejected in writing. Important step: Check your declarations page to confirm whether you currently carry it. Multiple vehicles: Do not assume the limits multiply simply because several vehicles appear on the policy. Property damage: Review whether Uninsured Motorist Property Damage appears on your policy and what deductible or conditions apply. |
NEW MEXICOUM/UIM: New Mexico policies follow different UM/UIM requirements and rules. Multiple vehicles: The BundleBee guide highlights stacking as an important consideration for qualifying New Mexico policies. Limits: Review the actual UM/UIM limits shown on the declarations page. Best practice: Ask your agent to explain how much coverage would actually be available after one accident. |
The Texas Rejection Form — Read Before You Sign
Texas drivers may be asked to sign a written rejection if they decline UM/UIM coverage.
That decision can reduce your premium. However, it can also remove an important source of protection if an uninsured or underinsured driver causes a serious loss.
Therefore, understand what you are declining before signing a rejection and ask your agent what it would cost to keep the coverage.
⚠ UIM Works Differently Than Many Drivers Expect
UIM is designed to address an eligible shortfall after the at-fault driver’s available liability coverage is considered. It should not be viewed as an automatic extra payment on top of every liability settlement.
The BundleBee guide uses an example involving $90,000 in injuries and an at-fault driver with $30,000 of bodily injury coverage to illustrate a $60,000 shortfall.
The actual amount payable depends on your UIM limits, policy language, applicable law, offsets, damages, and other claim-specific factors.
Stacking Explained
Page 2 of the BundleBee guide uses a two-vehicle example to show why stacking can matter for a multi-vehicle household.
TEXAS EXAMPLEVehicle 1: $100,000 UM Vehicle 2: $100,000 UM PDF example available per accident: $100,000 |
NEW MEXICO EXAMPLEVehicle 1: $100,000 UM Vehicle 2: $100,000 UM PDF stacked example: $200,000 available |
The example illustrates why multi-vehicle families should ask how their policy treats UM/UIM limits instead of assuming each listed vehicle automatically creates an additional pool of coverage.
Real-World UM/UIM Scenarios
Scenario A — Uninsured Driver on Loop 375
The BundleBee guide describes Maria being rear-ended near Yarbrough by an uninsured driver. Her medical expenses and lost wages total $75,000.
In the PDF example, the at-fault driver has no insurance and no assets. Without UM on Maria’s Texas policy, the guide illustrates how she could be left pursuing the uninsured driver personally.
By contrast, the guide’s example with $100,000 per-person UM coverage shows $75,000 of eligible losses fitting within that limit, subject to policy terms and the claim.
Scenario B — Underinsured Driver on I-25
The second PDF example involves two family members with a combined $110,000 in medical claims after a crash.
The at-fault driver’s policy provides $60,000 in the example, leaving a $50,000 shortfall.
The scenario demonstrates why both UIM limits and the way a multi-vehicle policy applies those limits can matter when damages exceed another driver’s available insurance.
What About Damage to Your Vehicle?
UM/UIM discussions often focus on injuries. However, property damage can matter too.
The BundleBee guide discusses Uninsured Motorist Property Damage, or UMPD, as coverage that may apply when an uninsured driver damages your vehicle.
Collision coverage can also protect your vehicle after a covered collision. However, UMPD and collision are not identical. Deductibles, eligibility, fault requirements, and policy terms can differ, so review both coverages on your policy.
5 Actions to Take on Your UM/UIM Coverage Right Now
✓ 1. Pull Your Declarations Page
First, find the Uninsured Motorist and Underinsured Motorist sections on your auto declarations page. Check whether coverage is listed and note the limits shown.
✓ 2. Review Any Texas UM/UIM Rejection
Next, if you have a Texas policy and previously declined UM/UIM, ask your agent about your current options. Do not assume an earlier coverage decision is the only option available to you now.
✓ 3. Compare Your UM/UIM and Liability Limits
Then, compare the limits you carry to protect other people with the limits available to protect you from uninsured or underinsured drivers. Ask your agent to explain how those limits would respond in a serious loss.
✓ 4. Multi-Vehicle Families Should Review Stacking
In addition, households with two or more vehicles should confirm whether and how limits may combine under the applicable policy and state rules. This can materially change the protection available after a serious accident.
✓ 5. Review Coverage if You Drive Across Texas and New Mexico
Finally, tell your agent if you regularly commute or travel between El Paso and Las Cruces. Your declarations page should reflect coverage that makes sense for how and where you actually drive.
The BundleBee Takeaway
You can control your own insurance policy. You cannot control whether the next driver who hits you carries enough insurance.
UM/UIM coverage is designed to help address that risk when an at-fault driver’s insurance is absent or insufficient, subject to your policy and applicable law.
Therefore, pull your declarations page, review your limits, and understand how your coverage works before you need it.
Free Declarations Page Review
Not sure whether your UM/UIM coverage is active or whether your current limits fit your needs? BundleBee serves El Paso and Las Cruces and can review your declarations page, explain your coverage, and compare available options.
Frequently Asked Questions
If I rejected UM/UIM on my Texas policy, can I ask to add it?
Yes, you can contact your insurance agent and ask about adding UM/UIM coverage. The carrier can explain the available limits, premium, forms, and effective-date requirements that apply to your policy.
Does UM coverage only protect me while I am driving my own car?
Not necessarily. The BundleBee guide notes that UM protection may apply in other covered situations, including some claims involving an insured person who is struck as a pedestrian or cyclist. However, coverage depends on the policy and circumstances, so review your specific contract.
What is UMPD?
UMPD stands for Uninsured Motorist Property Damage. It can provide coverage for eligible vehicle damage caused by an uninsured driver. It differs from collision coverage, so check your policy for the applicable deductible, conditions, and limits.
Can UM coverage apply to a hit-and-run?
It may, depending on the policy, applicable law, and facts of the accident. The BundleBee guide specifically warns that physical-contact requirements can matter in hit-and-run claims. Therefore, review your policy rather than assuming every unidentified-driver accident qualifies.
Is UM the same as UIM?
No. UM generally addresses an at-fault driver who has no applicable insurance. UIM generally addresses a situation where the at-fault driver has insurance but the available limits are insufficient for the eligible loss.
How much UM/UIM coverage should I carry?
There is no single limit that fits every household. Review your liability limits, assets, income exposure, household drivers, vehicles, and budget with your agent. Most importantly, understand the dollar limits you currently have before deciding whether to change them.