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Uninsured motorist insurance is additional protection you can buy as part of your own automobile insurance contract. Because uninsured coverage is not mandatory for drivers in most states, many drivers elect not to purchase it, although not doing so may result in having to pay their accident-related expenses out of their own pocket, even when the accident wasn’t their fault.

To avoid this situation, here are some guidelines for buying UM coverage:

The More You Own, the More Insurance You Need

Your regular third-party liability limits should be adequate to protect you up to your conservative net worth. If you have little or no savings, home equity, or net worth, your insurance requirements will be modest. As a rule, you should buy uninsured motorist coverage up to an equal amount of your third-party liability coverage, if you can afford it.

Don’t Assume That Your Insurance Company Will Recommend the Proper Coverage

Insurance companies have no duty by law to recommend the proper amount of insurance coverage, and most agents would rather keep your premiums low to remain competitive in the marketplace than sell you additional coverage. For this reason, you’re probably better off getting advice about UM coverage from an attorney rather than from an insurance agent.

Buy More Rather Than Less

The argument is sometimes made that if you have health insurance, you do not need uninsured motorist coverage. But most drivers cannot afford to incur significant lost earnings, diminished future earning capacity, and a greatly reduced quality of life, damages that health insurance will not cover. By law, uninsured motorist coverage typically makes medical expenses, lost earnings, and future losses recoverable.

If you’re like many people, finances may be tight these days. But when shopping for car insurance, it’s usually best to buy what you need – don’t skimp.

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