Uninsured Motorist Coverage- An Underestimated Niche?

Most states in the US require auto insurance, but not all people are insured. Even if you’re insured, you will not get reimbursed if the driver that hits you is uninsured. Thus, people have a choice to opt for uninsured motorist coverage – which agents can help acquire. But is tapping into this market worth it? Let’s find out!

What Falls Under Uninsured Motorist Coverage?

Property vs. Bodily

Insurance agents can sell uninsured motorist insurance for both bodily and property damages. Uninsured motorist coverage for property damage kicks in when you are hit by someone who doesn’t have any or insufficient insurance. The insurance will cover your auto damages. Uninsured motorist insurance for bodily harm applies for the same reason. But instead of paying for auto damages, it will cover your physical injuries. 

Stacked vs. Unstacked 

For stacked insurance to kick in, you should meet the following conditions: 

  • You have multiple vehicles, all insured. 
  • You’re the victim in the accident. 

  • The other driver doesn’t have insurance. 
  • The damage cost is higher than the uninsured motorist coverage of any one of your vehicles. 

If you have uninsured motorist insurance, then the costs can be covered by stacking the insurance of all your vehicles. But while stacked insurance seems like a great catch, it is costly as compared to unstacked insurance. Furthermore, it is not allowed in some states. Some companies also don’t allow stacked insurance. While profitable, agents need to be mindful when selling stacked uninsured motorist coverage. 

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Uninsured Motorist Insurance vs. Collison Insurance

Collision insurance helps the insured cover costs in an accident, with no concern about who’s at fault. Moreover, it will even cover expenses if you hit an object. However, it excludes cases of theft, vandalism, and bodily damages. So, even if you have collision insurance, you can still have uninsured motorist insurance.  

The Trends

Research shows that, at tentatively, 13% of the US population is driving around without insurance. It means that more than 30 million drivers are uninsured. While some states are pushing to decrease these numbers, the market to sell uninsured motorist insurance is still huge. Here are the top 10 states with the highest uninsured motorist rates according to AAG:

  1. Florida
  2. Mississippi
  3. New Mexico
  4. Michigan
  5. Tennessee
  6. Alabama
  7. Washington
  8. Indiana
  9. Arkansas
  10. District of Columbia

These states are the best market to sell uninsured motorist coverage. Another incentive to sell such policies can be legal penalties. While penalties differ across states, they all involve fees, license suspension, and jail time.

Final Verdict

All in all, uninsured motorist insurance is still a vast market – at least in particular states. Despite strict regulations, many people still are uninsured. In the top 10 states for uninsured motorists, an insurance agent can sell a significant amount of uninsured motorist coverage policies. The penalties are indeed strict – but agents can leverage it to make sales. Thirty million is a vast market; you can make huge profits if tap into it effectively. 

Learn how you can flourish as an agent after one call!

Schedule a call right now and learn how you can ease your work, sell more, and increase your profits!