Updated June 24, 2021|7 min read
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Uninsured motorist insurance and underinsured motorist coverage, often shortened to UM/UIM, is required in some states and is optional in others, but it should be a serious coverage consideration for everyone buying car insurance.
UM/UIM, sometimes sold together and sometimes sold separately, are part of the handful of different types of coverage that make up a car insurance policy. UM/UIM covers the costs if you’re in an accident caused by a driver without insurance, or whose insurance doesn’t fully cover the damage they’re responsible for.
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Uninsured/underinsured motorist coverage generally only adds a few dollars to your monthly premium but the amount of coverage it gives you can be essential in the event of an accident.
When another driver causes an accident but doesn’t have insurance to pay for it, uninsured/underinsured motorist insurance (UM/UIM) will cover the costs
Uninsured motorist coverage and underinsurance motorist coverage are two separate coverages that are often paired together
Like liability coverage, UM/UIM are split into bodily injury coverage and property damage coverage
UM/UIM insurance is optional in most states, but a minimum amount is required by law in some states, including Connecticut, Virginia, and New York
Uninsured motorist coverage protects you financially if you’re in an accident with an uninsured motorist. Underinsured motorist coverage, which is sometimes combined and sometimes offered separately from uninsured motorist coverage, protects you financially when you’re in an accident with a motorist whose insurance limits aren’t high enough to pay for the extent of the damage they’ve caused.
Like liability coverage, there are two categories of uninsured/underinsured motorist coverage: Uninsured/underinsured motorist bodily injury coverage and uninsured/underinsured motorist property damage coverage.
UMBI/UIMBI can cover the costs if you or your passengers get hurt in an accident involving an uninsured or underinsured driver. It can pay for injuries to you or your passengers under the following circumstances:
When an uninsured driver is deemed at-fault
If you’re the victim of a hit-and-run driver
If you’re hit by an uninsured driver while riding a bike or walking
This coverage includes medical expenses and lost wages; it may also pay for rehabilitation or even funeral costs if you or a passenger die in an accident caused by an uninsured or underinsured driver.
UMPD/UIMPD pays for damages when your car or other property is hit by an uninsured driver. Normally, the costs of repairing your car after another driver hits you would be covered by their liability insurance, but if the other driver is uninsured, you’ll need uninsured/underinsured motorist coverage or be stuck paying for the damage yourself.
Not all states and insurance companies offer both bodily injury and property damage coverage. UMBI/UIMPD is the more important of the two, since you likely have other types of insurance that will cover your injuries, but you may not have other coverage to pay for damage to your vehicle after an accident. UMPD is often referred to simply as “uninsured motorist insurance.”
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The main reasons to buy uninsured motorist coverage are because it’s required, either by law for your vehicle lease or loan company, and because it offers you more protection if you’re hit by an uninsured motorist than any other component of car insurance coverage can offer. Here’s who should get uninsured/underinsured motorist coverage:
Some drivers need uninsured motorist coverage because it’s required by law. Auto insurance is required in almost every state, but the types and amounts of insurance required vary. Bodily injury liability coverage is the most commonly required insurance, but nearly half of states also require uninsured/underinsured motorist coverage. The states that require some amount of uninsured or underinsured motorist coverage are:
The most common amounts of uninsured/underinsured motorist coverage required by states that mandate it are $25,000 per person and $50,000 per accident, the same as most states’ liability coverage limits. But as with all state car insurance required amounts, these minimums may be too low for most people and could leave you open to risk.
➞ Learn your state’s auto insurance requirements, including the minimum required amounts for uninsured/underinsured motorist coverage
Many leasing and financing agencies, including dealerships and banks, require that your insurance policy include uninsured/underinsured motorist coverage. When you lease or finance a car, there is another party who has an interest in protecting the vehicle, so your lessor or lender will lay out certain requirements for the car insurance coverage you purchase, typically including some amount of uninsured/underinsured motorist coverage.
Even if uninsured motorist insurance is not required in your state, you may decide you want uninsured motorist coverage to reduce your own risk (most experts recommend it.)
About 13% of drivers in the United States are uninsured, according to the Insurance Information Institute, and in some states, that number creeps up to 30% (Mississippi), 26% (Michigan), 24% (Tennessee), and 22% (New Mexico and Washington).
If you get hit by one of these drivers and sustain injuries or damage to your vehicle, you could be the one who has to pay the price — even if the collision wasn’t your fault. (That’s not to mention the drivers who are underinsured and may not have enough coverage to pay for extensive damages or injuries.)
Uninsured motorist coverage may have some overlap with other coverage types under your auto policy or other insurance policies you may have, like health or disability insurance. In each instance, uninsured motorist insurance can offer more robust or additional coverage, but it’s good to understand how the coverages compare to one another.
Below are the coverage components that make up what is called a “full coverage” auto insurance policy:
|COVERAGE TYPE||WHAT IT DOES|
|Bodily injury liability||The part of your liability coverage that pays for medical bills if you've injured someone in an accident|
|Property damage liability||The other part of liability coverage, covers the cost of property damage you've caused in an accident|
|Personal injury protection||Covers medical expenses for you or your passengers after an accident|
|Uninsured/underinsured motorist||Covers the costs if you're in an accident caused by a driver with little or no car insurance|
|Comprehensive||Covers damage to your car that happens when you're not driving|
|Collision||Covers damage to your car after a car accident, no matter who was at fault|
Uninsured/underinsured motorist coverage pays for medical bills if you’re injured by an uninsured or underinsured driver, but there is another type of auto insurance coverage that may also pay your medical bills in that situation: personal injury protection (PIP).
PIP is another type of car insurance coverage that is optional in some states and required in what are called “no-fault” states. In some states that don’t require PIP, medical payments coverage, or Med Pay, is the equivalent. PIP coverage pays for your medical bills (and those of your passengers) if you get into an accident, no matter who is at fault. If you have PIP coverage, it would cover you if you are injured by an uninsured driver, but PIP coverage limits are usually low. Uninsured motorist coverage would pay your medical and other expenses after your PIP limits are met.
Your coverage limit is the maximum amount your insurance company will reimburse you. For example, if you have $10,000 in PIP coverage and your accident results in $15,000 worth of medical expenses, your insurance will reimburse you the $10,000 and the remaining $5,000 you’d have to pay out of pocket. If you have uninsured motorist liability coverage, it could kick in to pay the remaining $5,000.
PIP and UM/UIM can also both pay for lost wages if you’re injured in an accident. Though again, PIP limits are generally lower than the coverage offered by uninsured motorist insurance.
If you’re injured in a car accident, your health insurance will pay for your related bills, up to your limits and minus your deductible and coinsurance costs. That's true whether the accident was your fault or not, so if you have good healthcare coverage, and know that any regular passengers of your vehicle do as well, you may feel comfortable forgoing uninsured motorist coverage.
If you can’t work because of an injury, illness, or disability, disability insurance can pay you roughly the same amount (typically 80%) of your paycheck while you recover. Many people have short-term disability coverage through their employers and you can also purchase long-term disability insurance independently.
If you’re seriously injured in a car accident and unable to work, disability insurance may cover a portion of your lost wages after a waiting period, however UM/UIM coverage could be able to cover you before disability insurance kicks in (usually after 90 days, for short-term disability policies). Both types of insurance cover lost wages due to injury from a car accident, however UM/UIM coverage does not require a waiting period.
Uninsured motorist property damage pays for damage to your car after an accident with an uninsured driver; collision coverage pays for damage to your car when it's in an accident no matter who is at fault.
Many people choose between uninsured motorist property damage coverage and collision coverage when buying insurance. But if you have collision coverage, you may not need UMPD.
Collision coverage is more robust than UMPD — for example, if you crash your own car into a tree or get in an accident where you’re at fault, collision coverage would still pay for the damage to your car, while uninsured motorist property damage only pays if the uninsured driver is at fault.
Collision coverage applies to more situations than uninsured/underinsured motorist coverage. UM/UIM coverage covers your injuries and vehicle repairs when an uninsured or underinsured driver causes an accident, but collision coverage also covers you and your car when you’re responsible for causing the accident, like if you hit another driver or back into a telephone pole.
If you decide not to add uninsured motorist coverage to your policy, you won’t be covered if you get into an accident with an uninsured driver and you would need to pay for that damage out of pocket. However, your injuries would still be covered if you have personal injury protection, and your car can still get car repairs through collision coverage. If you live in a state where UM/UIM coverage is required, however, you must add it to your policy.
Even if you have health insurance, you may also need uninsured/underinsured motorist coverage if you live in one of the states that require that coverage. There are currently 21 states, plus Washington D.C., that require at least some amount of uninsured or underinsured motorist coverage.
Uninsured/underinsured motorist coverage exists to protect you and your car after an accident with an uninsured or underinsured driver. Without UM/UIM coverage, you may be on the hook for some of the costs to repair the damage, although collision coverage can step in here too. And if you have good health insurance, you may not feel like you need UM/UIM coverage for bodily injury.