Uninsured and Underinsured Motorist Coverage, Explained

Liability insurance protects other people when you are at fault. But what protects you when someone else is at fault and cannot pay? That is the gap uninsured and underinsured motorist coverage is designed to fill, and it is one of the most commonly overlooked parts of an auto policy.

The problem it solves

Not every driver on the road carries insurance, and many who do carry only low limits. If one of them causes a crash that injures you, their coverage might be nonexistent or too small to pay your medical bills. Without protection of your own, you could be left pursuing the other driver personally, which is often slow and may not result in full payment.

Uninsured vs. underinsured

• Uninsured motorist (UM) coverage can apply when the at-fault driver has no liability insurance. In many policies it also applies to hit-and-run drivers who cannot be identified.
• Underinsured motorist (UIM) coverage can apply when the at-fault driver has insurance, but not enough to cover your losses.

Many insurers sell the two together as one coverage, often called UM/UIM.

What it may pay for

Depending on your state and the choices on your policy, UM/UIM can include bodily injury coverage, which may help with medical expenses, lost wages and pain and suffering for you and your passengers. Some states and policies also offer uninsured motorist property damage coverage, which can help repair your vehicle, sometimes with a small deductible. Whether property damage is included, and how, differs by state.

Is it required?

It depends on your state. Some states require insurers to offer UM/UIM, and in some you must reject it in writing if you do not want it. Others require drivers to carry it. Check with your state department of insurance or an agent.

How much should I carry?

There is no one right answer. Many insurers let you match your UM/UIM limits to your own liability limits. The more you could lose in a serious injury accident, the more worth considering higher limits. Because the coverage protects you from other people's lack of insurance, the limits you choose are about your own medical and income risk, not theirs.

Making a UM/UIM claim

1. Report the accident to police, and note the other driver's details if possible. For a hit-and-run, a police report is often important.
2. Notify your own insurer promptly and tell them the other driver was uninsured, underinsured or unidentified.
3. Keep records of medical treatment, bills and time missed from work.
4. Work with your insurer's adjuster. If you disagree on the outcome, ask about the dispute process in your policy.

More on the process is in our guide to filing an auto insurance claim.

The cost question

UM/UIM is usually a modest part of a premium compared with its potential value, but the price depends on state, limits and your insurer. Ask for quotes with and without it so you can see the difference for yourself.