Car accidents can become financially complicated when the at-fault driver has no insurance or does not carry enough coverage to pay for the damage they cause.
Uninsured motorist and underinsured motorist coverage are designed to provide protection in certain situations involving drivers with insufficient insurance.
What Is Uninsured Motorist Coverage?
Uninsured motorist coverage, often called UM coverage, may help protect you when you are involved in a covered accident caused by a driver who does not have auto insurance.
Depending on the policy and location, coverage may apply to certain medical expenses and other eligible losses.
What Is Underinsured Motorist Coverage?
Underinsured motorist coverage, often called UIM coverage, may apply when the at-fault driver has insurance, but their policy limits are not high enough to cover all eligible losses from the accident.
For example, if another driver’s liability coverage pays only part of your covered expenses, UIM coverage may help with certain remaining amounts, subject to your own policy limits and terms.
What Can UM and UIM Coverage Include?
Depending on the policy and jurisdiction, uninsured or underinsured motorist coverage may help with certain expenses such as:
- Medical bills
- Lost income
- Injury-related expenses
- Certain damages resulting from bodily injury
- Other covered losses
Some policies may also include or offer separate protection for property damage.
What Is Uninsured Motorist Property Damage?
Uninsured motorist property damage, sometimes called UMPD, may help pay for damage to your vehicle caused by an uninsured driver.
Availability varies by state and insurer.
It may also include a deductible depending on the policy.
Example of Underinsured Motorist Coverage
Imagine you are injured in an accident caused by another driver.
Suppose your eligible losses total $80,000, but the at-fault driver’s applicable liability limit is only $30,000.
Depending on your policy, your underinsured motorist coverage may help with part of the remaining eligible amount.
This is only a simplified example. Actual payments depend on policy limits, state rules, exclusions, and other factors.
Is UM or UIM Coverage Required?
Requirements vary by state.
Some states may require insurers to include or offer uninsured or underinsured motorist coverage, while others may allow drivers to decline it under certain conditions.
Always check your local insurance requirements and policy documents.
What Happens in a Hit-and-Run Accident?
Some uninsured motorist policies may provide protection in certain hit-and-run situations.
However, rules can vary considerably.
For example, some policies or jurisdictions may have specific reporting requirements or conditions that must be met.
Does UM Coverage Have a Deductible?
Whether a deductible applies depends on the type of coverage and policy.
Bodily injury-related uninsured motorist coverage may work differently from uninsured motorist property damage coverage.
Your insurer can explain the deductibles that apply to your policy.
How Much Coverage Should You Consider?
The appropriate amount depends on your circumstances and available options.
Factors to consider may include:
- Your existing liability limits
- Health insurance coverage
- Financial resources
- Vehicle value
- Available UM/UIM limits
- Cost of the additional coverage
Compare the available limits and understand what the policy actually covers.
UM/UIM vs Liability Insurance
Liability insurance and UM/UIM coverage serve different purposes.
Liability insurance generally helps pay for certain injuries or damage you cause to other people.
Uninsured and underinsured motorist coverage may help protect you when another driver is responsible but has inadequate or no insurance.
Final Thoughts
Uninsured and underinsured motorist coverage can provide an additional layer of financial protection after certain accidents.
Because availability, requirements, limits, and covered losses vary by location and insurer, always read your policy documents carefully and verify details directly with your insurer.
Disclaimer: Premium Cover Guide provides general educational information only. This article does not provide personalized insurance, legal, or financial advice. Coverage requirements, limits, exclusions, and claim rules vary by insurer, policy, and location.