What uninsured and underinsured motorist coverage does
Uninsured motorist (UM) coverage pays for your injuries and vehicle damage if you're hit by a driver who has no insurance. Underinsured motorist (UIM) coverage pays the difference when the at-fault driver's insurance isn't enough to cover your losses. Both protect you when the other driver can't or won't pay.
These coverages work separately from your own liability insurance — they're designed to cover you, not to pay someone else's claim. If you're injured or your car is damaged and the responsible driver is uninsured or underinsured, your own policy steps in to cover medical bills, lost wages, pain and suffering, and repair costs, up to your policy limits.
In most states, your insurance company will try to recover what they paid from the at-fault driver or their insurance later. This is called subrogation. Until that happens, you're protected by your own policy rather than waiting for money that may never come.
Key Takeaways
- Uninsured motorist coverage pays your medical bills and vehicle damage when hit by an uninsured driver; underinsured motorist coverage covers the gap when their insurance isn't enough.
- These coverages are separate from your liability insurance and protect you, not the other driver.
- Coverage limits vary by state and by your policy — some states set minimums, others let you choose, and a few don't require it at all.
- Collision and comprehensive coverage pay for vehicle damage regardless of fault, while UM/UIM covers your medical expenses and other losses when the other driver is uninsured or underinsured.
- You can typically choose your coverage limits when you buy or renew your policy, and higher limits cost more but protect you better in serious accidents.
How UM and UIM coverage differs by state
State insurance laws vary significantly. Some states require UM/UIM coverage as part of every auto policy unless you actively reject it in writing. Other states make it optional, meaning you have to ask for it and pay extra. A handful of states don't require it at all, though insurers may still offer it.
The minimum coverage amounts also differ. Some states set a floor — for example, $25,000 per person and $50,000 per accident for bodily injury — while others let you choose any limit you want. A few states use a different system called add-on coverage, which stacks on top of the at-fault driver's insurance rather than replacing it.
Your state's Department of Insurance website or your insurance agent can tell you what's required where you live and what your options are. This matters because choosing too low a limit can leave you short if you're seriously injured.
When UM coverage pays and when it doesn't
UM coverage pays when you're hit by a driver with zero insurance. This includes hit-and-run accidents where you never identify the other driver — many policies cover this automatically, though some require you to file a police report and meet other conditions.
UM does not pay for damage to your vehicle in a hit-and-run unless you also have collision coverage. Collision covers vehicle damage from any accident regardless of fault, while UM covers your medical bills and other losses. You need both to be fully protected.
UM also doesn't pay if you're at fault for the accident, if you're injured while committing a crime, or if you're hit by a vehicle owned by someone in your household who has insurance. The specifics depend on your policy language, so read your declarations page or ask your agent about the exact limits.
When UIM coverage pays and when it doesn't
UIM coverage pays when the at-fault driver has insurance but their limits are too low to cover your losses. For example, if they have $25,000 in bodily injury coverage and your medical bills and other damages total $75,000, your UIM coverage can pay up to your policy limit to cover the $50,000 gap.
UIM does not pay if you're at fault, if the at-fault driver has enough insurance to cover your losses, or if you don't have UIM coverage on your policy. It also typically doesn't pay for property damage to your vehicle — that's what collision coverage is for — though some states and policies do offer underinsured motorist property damage (UIMPD) coverage.
You'll need to prove your damages exceed the other driver's insurance limits before UIM kicks in. Your insurance company will usually handle this negotiation, but if the amounts are disputed, you may end up in arbitration or court.
Choosing your coverage limits
Your UM/UIM limits are separate from your liability limits. You might carry $100,000 in liability coverage but choose $250,000 in UM/UIM, or vice versa. Higher limits cost more but protect you better if you're seriously injured.
Consider your assets, your income, and the likelihood of a serious accident. If you have significant savings or own a home, higher limits make sense because a major injury could result in damages that exceed lower policy limits. If you have minimal assets, lower limits may be acceptable, though you're still taking on personal risk.
Some insurers offer "stacked" coverage, which means your UM/UIM limits apply separately to each vehicle on your policy or each occupant in your car. Others offer "unstacked" coverage, where the limit is shared among all vehicles or occupants. Stacked coverage is more expensive but pays more in multi-vehicle or multi-occupant accidents. Ask your agent which option is available and which makes sense for your situation.
How UM/UIM claims work
If you're hit by an uninsured or underinsured driver, report the accident to your insurance company as soon as possible. Provide your policy number, the other driver's information (if available), the accident location, and details about your injuries or vehicle damage. Take photos of the scene, the vehicles, and any visible injuries.
Your insurance company will assign a claims adjuster who will investigate the accident, review police reports, and gather medical records if you were injured. If the other driver is uninsured, the adjuster will verify this by checking state insurance databases. If the other driver is underinsured, the adjuster will confirm their coverage limits and calculate the gap.
Once the investigation is complete, your insurer will make an offer based on your policy limits and the extent of your damages. If you disagree with the offer, you have the right to dispute it. Some policies include arbitration clauses that require a neutral third party to decide the amount rather than going to court.
UM/UIM versus collision and comprehensive coverage
These coverages overlap in some ways but serve different purposes. Collision coverage pays for damage to your vehicle from any accident, regardless of who's at fault. Comprehensive coverage pays for non-collision damage like theft, weather, or vandalism. Both have deductibles you pay out of pocket.
UM/UIM covers your medical bills, lost wages, and pain and suffering when the other driver is uninsured or underinsured. It doesn't typically cover vehicle damage — that's collision's job. However, some states offer UIMPD (underinsured motorist property damage) coverage, which does cover vehicle damage when the at-fault driver's property damage liability is too low.
You can have collision and comprehensive without UM/UIM, but you'll be unprotected if hit by an uninsured driver and injured. You can also have UM/UIM without collision, but your vehicle won't be covered for damage in an accident. Most people carry all three for complete protection.
Frequently Asked Questions
Do I have to carry uninsured motorist coverage?
It depends on your state. Most states require it unless you sign a written rejection, but a few make it optional. Your insurance agent or state insurance department can tell you what's required where you live. Even if it's optional, carrying it is usually worth the cost because so many drivers are uninsured.
What if I'm hit by a hit-and-run driver?
Uninsured motorist coverage typically covers hit-and-run accidents, but you usually have to file a police report and meet other conditions set by your policy. Check your policy or call your agent to confirm your coverage applies and what documentation you need to provide.
Can I use UM coverage if I'm partially at fault?
It depends on your state's comparative fault laws. In some states, you can recover even if you're partially at fault, though your payment may be reduced by your percentage of fault. In others, you can't recover if you're more than 50% at fault. Your insurance company will explain how this works in your state.
What's the difference between stacked and unstacked coverage?
Stacked coverage means your UM/UIM limits apply separately to each vehicle on your policy or each person in your car, so you can recover more in a serious accident. Unstacked coverage means the limit is shared, so you recover less. Stacked costs more but pays more. Ask your agent which is available and which fits your needs.
Will my rates go up if I file a UM claim?
Not typically. Because you're not at fault, most insurers don't raise your rates for a UM claim. However, rates vary by company and state, so ask your agent before you file. If your rates do increase, you can shop around for a better rate with another insurer.