What is UM Insurance?

Imagine that a husband, wife and three children are going to their favorite local restaurant when suddenly a pickup truck driven by a drunk driver crashes into the family’s van in their lane of traffic. The husband and the wife both receive serious injuries and are unable to work for over a year. All three children receive severe permanent injuries. The drunk driver is convicted of driving while intoxicated for the third time and driving on a revoked license. Of course, the drunk driver has no automobile liability insurance, no assets and no income.


Who will pay compensation for the losses that this family has sustained? In such a scenario, the main source of compensation will be the UM insurance provided by the family’s automobile insurance policy. UM insurance is an abbreviation for uninsured motorist insurance or underinsured motorist insurance. With adequate UM coverage, the injured family would be entitled to have their own automobile insurance pay the amounts that the drunk driver would normally pay to the family.


In Tennessee, when you purchase automobile liability insurance, you are required to be given the option to purchase UM coverage that provides the same limits of coverage as your liability coverage. For instance, if you purchase a liability policy that provides up to $500,000 liability coverage, then you may also purchase UM coverage that provides coverage of up to $500,000. UM insurance not only protects you if the other party does not have any insurance, but it provides coverage if the other party has lower insurance limits than you have. For instance, if the drunk driver had $50,000 coverage, his policy would be responsible for the first $50,000 in damages and then the family’s policy would pay the rest of their damages up to policy limits that the family had purchased. As a result, if the family had a $500,000 UM policy in place, the coverage would pay up to additional $450,000 in damages above and beyond what the drunk driver’s policy would pay. If the family did not have UM coverage, then they could only receive a maximum of $50,000, the limits of the other driver’s policy.


Best of all, UM coverage is relatively inexpensive in Tennessee. In addition, state law provides that making a claim under your UM coverage cannot be a basis to cancel your policy or raise your rates. If you purchase an umbrella policy or excess liability policy, you can get additional UM coverage to protect you and your family.


There are some limitations to UM coverage. It may not pay punitive damages. To have coverage, you must normally notify your carrier as soon as practical after the accident. Because of the number of Tennessee drivers that are uninsured or drastically underinsured, we highly recommend that you purchase UM coverage in an adequate amount to protect you and your family. We also recommend that when purchasing liability and UM insurance that you investigate the additional cost of getting higher insurance limits. The additional cost is often not significant when compared to the additional protection you receive.

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