Why You Need Uninsured Motorist Coverage—Even If You Have Health Insurance

At Singh Insurance & Financial Services, we often get the question: “If I have health insurance, why do I need Uninsured Motorist (UM) coverage?” It’s a valid concern, but the reality is that health insurance alone doesn’t provide full financial protection after an accident. Let’s break it down so you can make an informed decision.

Understanding Your Health Insurance Coverage

Before assuming that your health insurance will cover everything after an auto accident, ask yourself:

• Do you have deductibles, copays, and coinsurance?
• Do you understand how coinsurance works?

What is Coinsurance?

Coinsurance is the percentage of medical costs you’re responsible for after meeting your deductible. It represents a cost-sharing agreement between you and your health insurance provider.

How It Works:

1. You pay your deductible first.
   • Example: If your plan has a $1,500 deductible, you must pay this amount before insurance starts sharing costs.
2. After the deductible, you and your insurance share costs.
   • Example: If your plan has 80/20 coinsurance (insurance covers 80%, you cover 20%) and you have a $10,000 medical bill, insurance pays $8,000, and you’re still responsible for $2,000.
3. Once you hit your out-of-pocket maximum, insurance covers 100%.
   • If your plan has a $5,000 out-of-pocket max, once you reach that amount in deductibles + coinsurance + copays, insurance covers all remaining costs for the year.

Does Health Insurance Cover Auto Accidents?

Yes, but with limitations. Here’s what happens when you’re injured in an accident:

• Primary vs. Secondary Coverage: If you have Medical Payments (Med Pay) or Personal Injury Protection (PIP) in your auto policy, these coverages typically pay first. Health insurance kicks in only after those limits are exhausted.
• Deductibles & Copays Still Apply: Even if your health insurance covers an accident, you’re still responsible for deductibles, copays, and coinsurance.
• Subrogation Process: Your health insurer may try to recover costs from the at-fault driver’s auto insurance, which can be a long, complex process.

Why Uninsured Motorist (UM) Coverage is Essential

Now, let’s consider the worst-case scenario—you’re hit by a driver with no insurance or inadequate coverage.

Without UM Coverage:

• You’ll be left paying thousands in medical bills, lost wages, and other expenses out-of-pocket.

With UM Coverage:

• Medical Bills Covered: UM coverage helps pay for hospital bills, surgeries, and rehab costs.
• Lost Wages Replaced: If you can’t work due to injuries, UM coverage can compensate for lost income.
• Pain & Suffering Considered: Unlike health insurance, UM coverage can help with emotional distress and reduced quality of life.

What Health Insurance Won’t Cover in an Auto Accident

Even if your health insurance covers some medical costs, many accident-related expenses won’t be covered without UM/UIM or PIP.

1. Lost Wages – Health insurance doesn’t compensate you for lost income.
   • ✅ Solution: Uninsured/Underinsured Motorist (UM/UIM) or PIP can help replace lost wages.
2. Pain & Suffering – Health insurance won’t cover non-medical damages like emotional distress.
   • ✅ Solution: UM/UIM coverage can compensate for these losses.
3. Car Repairs or Replacement – Health insurance doesn’t cover vehicle damage.
   • ✅ Solution: Collision Coverage or the at-fault driver’s liability insurance.
4. Long-Term Disability Costs – If you become permanently disabled, health insurance may not cover home modifications, special equipment, or lost future income.
   • ✅ Solution: Disability insurance, PIP, or UM/UIM.
5. Funeral or Death Benefits – Health insurance won’t cover funeral expenses in case of a fatal accident.
   • ✅ Solution: PIP, UM/UIM, or life insurance.
6. Deductibles & Copays – Even if health insurance helps with medical costs, you’ll still have out-of-pocket expenses.
   • ✅ Solution: PIP or Med Pay can help cover these costs.

The Best Protection Strategy

To ensure maximum protection in an accident, consider this approach:
✔ Carry Med Pay or PIP coverage in your auto policy for immediate medical expenses.
✔ Invest in Uninsured/Underinsured Motorist coverage to protect against drivers with no or low insurance.
✔ Check your health insurance policy for accident-related exclusions or subrogation clauses.

Final Thoughts

Having health insurance is great, but it’s not a substitute for Uninsured Motorist coverage. Protect yourself, your finances, and your family with a well-rounded insurance strategy.

Need a personalized auto insurance review? Contact Singh Insurance & Financial Services today at singhinsurancegroup.com to ensure you’re fully protected!