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Uninsured Motorist Property Damage Coverage (UMPD)
The coverage that will protect against hit and runs
Under or Uninsured Motorist Property Damage (UMPD)
- First Party Coverage but also acts as third party coverage
- Fault based
- Deductible Applies
- Limits on amount of coverage
Uninsured Motorist Property Damage protects you in case an uninsured or underinsured driver hits you.
This coverage is fault based and only covers property damage and not bodily injury claims (you need the next coverage for that). Therefore, the insurance carrier will only pay the portion of liability or negligence given to the party that hit you.
Let us say there is a 50% split decision on negligence or fault.
Your insurance carrier will pay you only 50% under Uninsured Motorist Coverage (if this is a pure negligence state) or whatever a third party would be responsible for. In other words, your policy is insuring the person without insurance.
This seems to be straightforward, but there are other things you need to know about this coverage.
You need to know that you will be paid for your damages, and then the insurance company will have the right to go after the Uninsured Motorist that hit you (they will subrogate).
The insurance company, in some cases, ends up not recovering anything for the loss since most people without insurance have no collectable assets.
Because your insurance company will insure the responsible party, they first need to determine the following before they grant you any coverage:
1. Either this person did not have insurance, or he/she had insurance but the limits of coverage will be so low that he will be underinsured
2. The accident was caused at least in part by the under/uninsured party
How does this work then? I have Collision coverage; doesn’t this cover my damages anyway?
Yes and no. Technically speaking, you will not see any difference with the Uninsured Motorist Coverage. However, there are differences behind the scene and they are big.
The first difference is that your deductible is usually less, and it varies depending on the circumstances.
If you are in an accident where you know who hit you, then your deductible is $100 (or whatever your policy indicates).
If you do not know who hit you, like in a hit and run, then your deductible is $300 (or whatever your policy indicates).
But again, I have Collision coverage and now I just have a little lower deductible under Uninsured Motorist? Is that it?
No, that is what appears to be from the outside.
Your insurance company will literally pay from the uninsured property damage coverage (UMPD) to the collision coverage the entire deductible (sometimes just the difference between the two).
When they adjust your insurance rates, your payments under Collision coverage will be closer to $0, which will give you better rate on your insurance bill.
Under the Uninsured Motorist Coverage you become a third party to your own insurance company.
This means that you are not bound by some of the terms you were bound before.
To be able to have a rental car when your car is at the shop, normally you have to have rental coverage.
There are limits to this rental coverage (for example $30 dollars per day, and only for 4 weeks).
However, if you have Uninsured Motorist Property Damage Coverage, they would have to pay you as if you were a third party, with no limits.
Think about it as if other person hit you and this person’s insurance company will pay you for the damages their insured caused.
They will not tell you that you agreed to any limits because you do not have any business with them, they just have to pay for the damages owed. You will be able to get a rental car as long as you need it with no daily limit.
This applies even if you do not carry any kind of rental coverage on your policy.
Click below for an explanation insurance coverages and terms:
Automobile Liability Insurance or Liability Page 1
Automobile Liability Insurance or Liability Page 2
Automobile Medical Payments or Personal Injury Protection (PIP) Page 1
Automobile Medical Payments or Personal Injury Protection (PIP) Page 2
Collision Coverage (Protection Against Loss to the Auto) Page 1
Collision Coverage (Protection Against Loss to the Auto) Page 2
Comprehensive Coverage (Protection Against Loss to the Auto) Page 1
Comprehensive Coverage (Protection Against Loss to the Auto) Page 2
Under or Uninsured Motorist Property Damage (UMPD) Page 1
Under or Uninsured Motorist Property Damage (UMPD) Page 2
Under or Uninsured Motorist Bodily Injury (UMBI)
Rental Reimbursement or Loss of Use Coverage Page 1
Rental Reimbursement or Loss of Use Coverage Page 2
Insurance Clauses and Terms
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