Part of the way it was (accurately or not) explained to me is to protect you from liability for your own passengers’ injuries & medical expenses and such if you were in an accident and the other party was uninsured or under insured.
So you’re driving your kid and the neighbor kid to school and an uninsured motorist hits your car. The neighbor kid is hurt and his family’s insurance is going to go after both you and the other driver pretty much regardless of fault.
Further of course there are all the so-called “no-fault” states.
You are not wrong LSLGuy (and I was an insurance agent and adjuster, and I would have used the example you mentioned to one of my customers trying to decline that coverage, along with many others). Mostly I responding to Absolute’s scenario where he has good health insurance, COMP and COLL, what does it get him specifically.
But yes, it’s absolutely critical in the scenario where someone else in your car is not as well insured personally as you may be. Or if someone is driving your car (with your permission) and doesn’t have health coverage.
Personally, I carry liability, UM/UIM & UMPD, MedPay, and COMP (No collision, car too old to bother). There are valid reasons to have each, especially because in the event of an injury accident, the other party’s liability coverage may not pay out until they fully determine liability, at which point you’ll probably already have thousands of dollars in medical bills at a minimum.
Oh, another UM (more UIM) issue to consider is multi-car accidents. In policies I wrote for California, the minimum liability coverage is 15/30/5 (!!!) That is injury to 15k per person, not to exceed 30k per accident, and no more than 5k available in property damage. And I probably lost sales because I’d insist on quoting better coverage rather than just bottom lining it for quick sales. And then years later, when I handled claims for CA . . . well, sometimes I’d have clear fault but be telling the other party that they’d need to go to their own carrier because their loss was beyond the coverage available. And dear god, if you’re in a multi-car accident - I was on a conference call with 3 other adjusters, one from my own company, 2 from others as my insured had caused a chain rear end collision on the freeway. I had accepted fault, but explained that the 3 of them had to decide how to split the 5k we had available. Not happy.
Yes I’m leaving out examples of UM/UIM because I refused to be promoted to the level of handling non-property claims, which was too damn traumatic.