What is the Point of Splitting UM & UIM Coverages?

[BlockO]

up until recently, I have only had to deal with a state that combines the coverages as an all or none selection (meaning you select both uninsured and under-insured both, or you select neither one). there is no such thing as selecting UM but rejecting UIM.

but as I have learned, some states split these coverages. my question is WHY? unless I am missing something, I see no point in it. To me, that would be like gambling your UM/UIM coverage to a 50/50 coin toss just to save a few measly bucks.

I can't think of one scenario where splitting UM & UIM makes any sense. And unless I'm missing something, I don't think I want to even make this option available. looks like a bad idea!

 

[Sales71]

I agree with you no reason to split coverage. In my company um/underinsured is the same. It might be the advantage to the company to make them less to save on premium and pay less claim as well.

You should not have it as option for the client since most will pick the less cost one and later blame you for that E &O exposure.

 

[NCAgent]

People want options! They would like to choose the amount. If they have 250/500/100 coverages then they don't want 100k UM/UIM for their PD so they get the UIM reduced to 50 and that's it. Or maybe they don't want the UIM PD at all, which I am sure some states will allow.

I do see some people with 100/300/100 coverages get UIM of 50/100/50. Don't ask me why, they want to save some money so they do it. Basically they have the option to do it, even though it's not a good idea. I personally think that 50/100/50 should be taken out of the mix as well. I think there should be state minimum, 100/300/100, and 250/500/100, then 1M/1M and PUP, and CSL if the state allows it. none of this 50/100 or 200/300 or 300/300 BS.

I think we can agree that sometimes the states allow things that aren't always a good idea, like rejecting these kinds of coverages. Correct me if I'm wrong but doesn't the state of FL allow for cars not to drive with liability limits, just PIP? Or was that just some Allstate BS they spewed at me to make them sound better and more exclusive because they require it on all auto policies?

 

[BlockO]

I'm only referring to the BI part, not the UMPD. I don't think it applied to UMPD, at least with this carrier.

 

[Guest]

it really is fairly simple, thats what the DOI wants, so thats how it is.

in My state, AZ, with LOTS of illegals, Un-Inusred pays out ALOT, it is not unusual to get a call of a client saying, I was rear-ended and when i looked in the mirror, I saw 2 guys get out of the car and simply walk away, not even run, just simply walk way.

If you ever seen the numbers of how much un-insured and under-insured pays out, it would blow your mind.

It is simply a way for them to decided rates on what pays out the most and adjust rates accordingly.

It really isnt a big deal

 

[Turz]

it really is fairly simple, thats what the DOI wants, so thats how it is.

in My state, AZ, with LOTS of illegals, Un-Inusred pays out ALOT, it is not unusual to get a call of a client saying, I was rear-ended and when i looked in the mirror, I saw 2 guys get out of the car and simply walk away, not even run, just simply walk way.

If you ever seen the numbers of how much un-insured and under-insured pays out, it would blow your mind.

It is simply a way for them to decided rates on what pays out the most and adjust rates accordingly.

It really isnt a big deal

It's all about the rating. Ask any actuary.

 

[bobson]

It's all about the rating. Ask any actuary.

Yeah, and state law as well.