Canceling Your Uninsured Motorist Insurance Can Save You A Bundle — But Is It A Good Idea?

Author weighs the pros and cons of dropping that portion of his car insurance.

My wife and I had the misfortune of being in western North Carolina at the same time as Hurricane Milton. The devastation there was overwhelming and we were lucky that we escaped with nary a problem — except that our car had to be towed out of a ditch. And it took 3 days for us to find an available tow truck, which meant 3 days stuck in the house we rented. Eventually we got through the mud and downed trees, broken roads, power outages, and long gas lines and managed to drive home a week earlier than we had planned.

Fortunately the only insurance claim we needed was reimbursement for towing. In numerous conversations with our insurance company they repeatedly asked if we and our car were all right. We reassured them that we were fine and there was no damage to the car. But the last agent we were working with said, “Your premium for next year is coming due so now might be a good time for us to review your coverage.”

“Sure,” I replied, happy that we finally had decent phone service. After a brief pause, the agent startled me when she asked about our health insurance. I told her we were both on Medicare and are fully covered with a secondary plan as well. She then offered an option that it. turns out would save almost 40% off our semi-annual insurance bill. Apparently by eliminating the “Uninsured Motorist” coverage, the insurance company’s risk is significantly reduced and, therefore, they can lower our premium by a substantial amount.

What, exactly, is the Uninsured Motorist coverage and do I need it?

Intuitively I can figure out what it covers, but I asked anyway. The agent confirmed what I already knew stating that having UMC protects you if you’re involved in an accident with a driver who does not have insurance or does not enough insurance, or if you’re hit by a hit-and-run driver. And, she pointed out, that it would cover other expenses such as lost wages and “pain and suffering.”

Ok, that’s pretty clear. But I then realized that any medical expense I have as a result of an accident will be covered by my health insurance. I don’t work, so I wouldn’t have any lost wages. And other than my deductible, damage to my car would be paid for.

As best as I could figure, what I wouldn’t be covered for was that elusive “Pain and Suffering” that my insurance wouldn’t cover. So the question I had to ask is, “Is it worth it to me to pay almost 40% of my premium in a state that already has a high insurance rate when canceling it would save me almost $1500 a year here in FL?”

But every insurance professional I’ve ever spoken with makes sure I understand that insurance is all about giving you peace of mind. And uninsured motorist coverage means you’re financially protected against drivers who do not carry insurance. That’s particularly important if you live in an area with a high percentage of uninsured motorists.

Ah, there’s the rub. Florida is one of those states with a high percentage of uninsured (and underinsured) drivers. But here again I had to wonder: I drive so little these days that I’m not as exposed as most drivers. And $1500 is a hefty sum considering I have health insurance, don’t have wages, and drive very little.

But to cover this topic more thoroughly, I turned to the experts at the American Property Casualty Insurance Association. And here’s where I discovered a key point that I had not considered and one that the agent I spoke with also didn’t mention: UMC covers not only your medical bills, lost wages, and pain and suffering, it also covers medical bills, lost wages, and pain and suffering for your passengers.

That changed the whole dynamic. Peace of mind takes on a whole new meaning when I think about the times I’m transporting my loved ones!