What is uninsured and underinsured motorist coverage?

Uninsured motorist coverage
Uninsured motorist coverage (UM)

Uninsured motorist coverage protects you and your property after an accident in which the at-fault driver does not have car insurance.

Underinsured motorist coverage
Underinsured motorist coverage (UIM)

Underinsured motorist coverage protects you and your property when the at-fault driver has insurance, but not enough insurance to cover all the damage.

Due to the number of uninsured — and underinsured — drivers on the roads, these coverage types offer valuable protection. In this guide, we will review key benefits and components of uninsured and underinsured motorist coverage, including how it works, what it protects and how much it costs.

 

Uninsured/underinsured motorist coverage — quick facts:

  • Kicks in when the at-fault driver doesn't have enough — or any — liability coverage
  • Can protect you in the event of a hit-and-run collision
  • Costs more in states with higher numbers of uninsured drivers
  • Can cover instances in which an at-fault driver's insurer denies a claim or goes out of business

How uninsured and underinsured motorist coverages work

Both uninsured (UM) and underinsured motorist (UIM) coverages are designed to protect you against at-fault drivers who are unable to cover the damage that they cause. While nearly every state requires drivers to carry liability insurance, some drivers choose to illegally drive without it. Furthermore, many states have very low liability requirements. This means that even drivers who carry the legally required amounts of liability coverage may not be able to cover the damage that they cause. 

Even drivers who carry the legally required amounts of liability coverage may not be able to cover the damage they cause.

For example, if you are rear-ended, you would ideally file a property damage claim with the at-fault driver's insurance company. Your car would be repaired to its pre-accident condition. If the other driver does not have insurance or their limits are not high enough to cover your damages, uninsured/underinsured motorist coverage would step in to cover the costs.

Legally, a driver who is at fault is required to cover all damages, regardless of whether or not they carry enough insurance — or any at all. However, getting this money can be a hassle and can involve small claims court. At-fault drivers may leave the scene of an accident, leaving you with no insurance company with which to file a claim in the first place. Uninsured motorist coverage allows you to receive the money you need to be made whole while putting the onus on your insurer to recoup money from the at-fault driver. 


How much uninsured motorist insurance coverage costs

The cost of uninsured motorist coverage depends on many factors, including the insured party's driving history, location, and vehicle type.

The Zebra's data offers the following premium estimates based on a 30-year-old male driving a 2016 Honda Civic with no accidents or violations:

Coverage LevelAverage 6-Monthly Premium
Uninsured Bodily Injury$35
Underinsured Bodily Injury$21
Uninsured Property Damage$11
Underinsured Property Damage$11

Bodily injury vs. property damage

Both uninsured and underinsured motorist coverages are broken into bodily injury and property damage coverage options. Similar to liability coverage, uninsured bodily injury (UMBI) protects you on a per person, per accident basis. Your property damage (UMPD) coverage pays for damage to your vehicle on a per accident basis.

Uninsured/underinsured motorist — bodily injury (UMBI/UIMBI)

Bodily injury coverage goes toward paying for your medical expenses related to an injury caused by an at-fault driver. If they don't carry any coverage — or their liability limits aren't sufficient to cover your injuries — UMBI/UIMBI would kick in to pay for your expenses up to your policy limits.

Standard coverage limits for bodily injury coverage often align with state liability minimums and are similarly listed on a per person/per accident basis. For example, let's say your state's bodily injury liability limits are as follows:

  • 25/50 ($25,000 per person/$50,000 per accident)

Per person refers to how much your insurance company would pay for any single person's injuries, which in this case is $25,000. 

Per accident refers to the total amount that your insurer will pay out for all injuries through UMBI/UIMBI coverage, meaning it will pay up to $50,000 to cover the injuries of family members or others in your vehicle at the time of the accident.

UMBI/UIMBI limits may be increased in most situations, which is certainly a good idea in states with low liability limits.

Example scenario

If you're hit and injured by a Ford F-150 while driving home from work and the at-fault driver does not have insurance, you could be on the hook for your hospital bill. 

According to the ISO (International Organization of Standardization), the average bodily injury claim in 2019 was $17,024. If you have insufficient health insurance, you could be looking at a serious bill. This is where uninsured motorist coverage kicks in. You would be compensated up to your coverage limits for your injuries. Your insurance company would then sue the at-fault party for damage.

This would be similar if you had an accident with a driver without sufficient liability coverage. If the at-fault driver in the above example only carried the minimum limits of liability and your total bodily injury damage was $17,024, their coverage would not be enough in several states.

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Uninsured motorist — property damage (UMPD)

Uninsured motorist property damage coverage protects your vehicle if it's damaged by a driver without insurance or sufficient insurance. Many drivers forgo the use of uninsured property damage coverage because it is similar to collision coverage — they both protect the physical integrity of your vehicle. However, UMPD is a very helpful coverage for a few reasons:

  • Liability limits for property damage can be very low in certain states
  • Rate increases after an uninsured property damage claim are much lower than a collision claim
  • It protects against hit-and-run accidents

Some drivers forgo the use of uninsured property damage coverage because it is similar to collision coverage.

UMPD vs. collision insurance

For example, you are financing a 2020 Toyota 4Runner — MSRP starting at $36,120. On your way home from work, you’re hit by an uninsured driver, totaling your vehicle. Without uninsured property damage coverage, the only way to repay your loan and get a new vehicle would be to file a collision claim.*

Collision claims are seen as at-fault accidents and will impact your premium. On average in 2019, an at-fault accident raised rates $767 per year. Most insurance companies will charge you 3-5 years for violations and accidents. In this example, the uninsured driver’s damages would cost you $2,301-$3,835 plus your deductible.

UMPD claims are generally rated as a not-at-fault accident on your insurance premium — like a comprehensive claimOur research shows the average UMPD claim raises rates $72 per year in 2019. Your uninsured property damage coverage does feature a deductible. However, depending on the specifics of the accident, your insurance company can reimburse you for the deductible.

Year after AccidentCollision Claim Rate IncreaseUninsured Property Damage Claim Rate Increase
1$757$72
2$1,514$144
3$2,271$216

*You can also take the at-fault driver to small claims court. However, this doesn’t guarantee an immediate payout.

This is similar to underinsured motorist property damage coverage. If the vehicle is totaled near its asking price and the at-fault driver only carries the state minimum, their liability coverage will run out before you are fully compensated. There are no states in the US in which the minimum property damage liability limit is above $30,000.

In this example, you would be left in a situation where the at-fault driver does not have enough property damage liability coverage to pay for your damages. This is where underinsured property damage liability comes in. Like an uninsured property, this coverage features a deductible. You should be able to negotiate with your insurance company to have the at-fault driver to cover the deductible.


How much uninsured motorist coverage do I need?

If you live in a state that requires uninsured or underinsured coverage, you must at least carry the minimum set by the state. In most cases, you may elect to go beyond that coverage amount in order to fully cover the cost of a new vehicle or to ensure that you won't be stuck with high medical bills. 

Uninsured motorist bodily injury-related coverage will insure you against medical expenses and related costs in the case of injury, while property damage coverage will protect your motor vehicle. Depending on your preference and your state, you can elect to carry one or carry both. In terms of dollar value limitations, it is recommended to have your liability limits and your uninsured motorist limits match. Most experts recommend keeping liability limits on your insurance policy at 100/300 ($100,000 per person/$300,000 per accident). 


Stacked vs. unstacked insurance coverage

Stacked insurance increases your uninsured motorist coverage based on the number of cars you insure. 

Stacked car insurance example: You own three vehicles insured with $10,000 worth of uninsured bodily injury coverage (UMBI). If you're struck by an uninsured driver with stacked coverage, you could apply all three vehicles' worth of $10,000 in UMBI coverage to give you $30,000 of total coverage.

Stacked coverage usually costs more than conventional coverage. Stacked coverage may not be available in every U.S. state.

Learn more about stacked car insurance.


States where uninsured motorist coverage is required

The following states require drivers to carry uninsured or underinsured motorist coverage. 

StateUninsured Motorist (bodily injury)Uninsured Motorist (bodily injury)
Underinsured motorist (bodily injury)
ConnecticutYes Yes
IllinoisYes Yes
KansasYes Yes
MaineYes Yes
MarylandYesYesYes
MassachusettsYes  
MinnesotaYes Yes
MissouriYes  
NebraskaYes Yes
New JerseyYesYesYes
New Hampshire*YesYesYes
New YorkYes  
North CarolinaYesYesYes
North DakotaYes  
OregonYes Yes
Rhode Island**YesYesYes
South CarolinaYesYes 
South DakotaYes Yes
VermontYesYesYes
VirginiaYesYesYes
Washington D.C.YesYes 
West VirginiaYesYes 
WisconsinYes  

 

*Car insurance is not required by law in New Hampshire, but drivers who purchase insurance are required to carry UM/UIM coverage.

**UM/UIM is mandatory if drivers carry more than the minimum liability limits.


Uninsured and underinsured coverage FAQs
 

Is uninsured motorist coverage required?

About one in seven drivers is uninsured. So there's a one-in-seven chance you could be responsible for paying for the damages to your vehicle after a collision caused by an uninsured driver, either through a collision claim or out-of-pocket. If this gives you pause, consider adding uninsured coverage to your policy.

 

Is uninsured motorist coverage worth it?

This question is difficult to answer. You should ask yourself whether you are comfortable with risk and how confident you are in your ability to pay damages out-of-pocket if a car accident were to occur. If you drive a luxury car, you might not be as willing to risk out-of-pocket payments as someone with an older owned vehicle. Consider your financial situation before bypassing uninsured motorist coverage.

 

How much uninsured motorist coverage is necessary?

If your state requires UM/UIM coverage, you will need to carry at least the minimum required. However, most experts recommend keeping liability and UM/UIM limits on your insurance policy at 100/300.


Uninsured drivers in U.S. states

Below are the states with the highest percentages of uninsured drivers. Uninsured and underinsured insurance coverage is potentially a good value if you live in a state ranked high on this list.

RankState% of Uninsured Drivers
1Oklahoma26%
2Florida24%
3Mississippi23%
4New Mexico22%
5Michigan21%
6Tennessee20%
7Alabama20%
8Rhode Island17%
9Colorado16%
10Washington16%
11Arkansas16%
12Kentucky16%
13California15%
14Indiana14%
15Montana14%
16Louisiana14%
17Missouri14%
18Ohio14%
19Illinois13%
20Texas13%
21Alaska13%
22Maryland12%
23Nevada12%
24Georgia12%
25Wisconsin12%
26Delaware12%
27Minnesota11%
28Arizona11%
29New Jersey10%
30Virginia10%
31Iowa10%
32Kansas9%
33New Hampshire9%
34North Carolina9%
35Oregon9%
36Hawaii9%
37Wyoming9%
38Vermont9%
39West Virginia8%
40Connecticut8%
41South Dakota8%
42South Carolina8%
43Idaho7%
44Nebraska7%
45Pennsylvania7%
46North Dakota6%
47Utah6%
48New York5%
49Maine5%
50Massachusetts4%

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Ross Martin
Ross Martin LinkedIn

As a licensed insurance agent, Ross is responsible for researching and writing about all matters related to insurance. He has a background in writing and education, as well as a master's degree from Royal Holloway, University of London. He has been quoted by CNET, iDriveSafely.com and Kin Insurance.