Uninsured vs Underinsured Motorist Insurance: Make Sure You’re Covered!

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Written By Rocky Horton

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Almost 13% of U.S. drivers don’t have auto insurance. In some places, this number is higher than 20%1. This means many people are at risk if they get into a crash. That’s why it’s so important to have uninsured or underinsured motorist insurance. These types of insurance help when the other driver doesn’t have enough or any insurance.

Car accident insurance does more than pay for your medical bills. It also helps with fixing your car and other costs up to your policy’s limits. Since a lot of drivers don’t have insurance, adding these protections can save you from serious money troubles after an accident.

Key Takeaways

  • Nearly 13% of U.S. drivers are uninsured, posing a significant risk.
  • Uninsured motorist coverage is essential to cover costs when involved in a crash with an uninsured driver.
  • Underinsured motorist coverage protects against at-fault drivers with insufficient insurance.
  • Different states have varying requirements for uninsured and underinsured motorist coverage.
  • Car accident insurance policies can include multiple coverages like UMBI, UMPD, UIMBI, and UIMPD.

What is Uninsured Motorist Coverage?

Uninsured motorist coverage is vital car insurance. It protects you if another driver causes an accident and doesn’t have insurance. This makes sure you aren’t left paying for everything on your own.

Definition of Uninsured Motorist Coverage

This coverage takes care of injury and damage costs when the other driver can’t pay. In 2019, about 13% of drivers didn’t have insurance across America4. So, having UM is a smart move to stay safe. It’s there to help especially when the other driver isn’t responsible.

What Does Uninsured Motorist Coverage Pay For?

UM can cover medical bills, lost wages, and fixing your car. It kicks in when you’re hit by an uninsured driver. This is up to your policy’s set limits. It means you can relax knowing your costs are taken care of, even if the other driver didn’t do their part. That’s why some states make it a must-have5.

Scenarios Where Uninsured Motorist Coverage is Needed

Being in an accident with someone who’s uninsured is tough. Especially if they run away or can’t pay. Uninsured motorist coverage is your safety net in these events. It makes sure you’re not left in a financial mess. And because most states require car insurance, its value is clear. Yet, many drivers still take the risk of being uninsured.

Having this coverage means you’re safer on the roads. It’s a reliable shield against those who drive without insurance.

What is Underinsured Motorist Coverage?

Underinsured motorist coverage (UIM) is a key part of your car accident insurance. If someone else causes the accident but doesn’t have enough insurance, UIM can help. It covers what the at-fault driver’s insurance can’t, protecting you from high costs.

Definition of Underinsured Motorist Coverage

Underinsured motorist coverage steps in when the other driver doesn’t have enough insurance. In Maryland, drivers must have some coverage. If they don’t, your UIM can help make up the difference. This way, you’re not left paying all by yourself.

What Does Underinsured Motorist Coverage Pay For?

UIM can handle several costs after an accident, such as:

  • It helps with medical bills whether they are minor or major.
  • If you can’t work due to the accident, it helps make up for lost wages.
  • It covers repairs or replacements for your car, especially in states like California where required coverage might not be enough7.

Scenarios Where Underinsured Motorist Coverage is Needed

There are a lot of times when having UIM is crucial:

  1. After serious accidents, medical bills can be very high, and UIM makes sure they’re taken care of if the other driver doesn’t have enough coverage.
  2. If fixing or replacing your car is more than what the other driver’s insurance covers, UIM pays the difference.
  3. Missing work for recovery can mean lost wages. UIM helps you get that money back.
  4. If you end up needing a lawyer, UIM can cover those costs too, making sure you have help when it’s needed.

The Importance of Uninsured vs Underinsured Motorist Insurance

Uninsured and underinsured motorist insurance is crucial for financial safety after a car accident. In California, the rate of uninsured drivers is 15.2%, ranking it 12th worst in the U.S8. A study in 2017 found that 13% of drivers across the nation didn’t have insurance in 2015, which means one in eight drivers was uninsured8. These statistics show why it’s vital to have comprehensive insurance coverage.

Georgia requires drivers to have liability insurance for at least $25,000 per person and $50,000 per accident9. But, some policies might have exceptions that remove this basic coverage. In such cases, people need UM and UIM to stay financially protected. It’s important to know that in Georgia, UM coverage should equal the liability limits, unless stated otherwise. This detail can be easily missed, leading to big problems later.

In California, the law demands minimal coverage: $15,000 for one person’s injuries and $30,000 for everyone in one accident. There’s also $5,000 for property damage8. Even with these rules, the risk from uninsured drivers is high. But, with UM and UIM insurance, you get extra protection if you’re in a crash with someone who doesn’t have insurance.

Choosing to not get or reduce UM/UIM coverage in states like Georgia might be a big mistake if you’re in a crash with someone who isn’t properly insured. It’s key to be aware of the dangers. This coverage helps not just with immediate costs but also avoids later financial strains.

Differences Between Uninsured and Underinsured Motorist Insurance

It’s key to know the differences between UM and UIM insurance. This knowledge ensures you’re fully protected after a car accident. Each type helps in various situations and has its own way to file claims. Understanding this helps pick the best coverage per your state’s car insurance laws.

Coverage Limits

UM and UIM insurance have different coverage limits. UM helps you if the at-fault driver has no insurance. For instance, in a crash with no-insurance driver, you’d file a claim under UM. UIM steps in when the at-fault driver’s insurance isn’t enough. If damages are $500,000 but the liable driver’s policy only covers $300,000, UIM can cover the $200,000 gap.

Filing Claims

When making claims, UM and UIM are also handled differently. If an uninsured driver causes the accident, file through your UM with one claim. For underinsured cases, you submit claims to both the at-fault driver and your own insurance. Seeking advice from a legal expert after an accident can ensure you get the most out of your policy, whether for UM or UIM coverage.

State Requirements

State laws play a big role in choosing UM or UIM coverage. In many places, including South Dakota, UM is required by law in auto policies. This is to protect you if hit by someone who’s got no or not enough insurance. States like South Carolina automatically add UM when you buy required liability insurance. But, underinsured coverage isn’t a must in South Carolina, although it must be offered. In Michigan, with nearly 30% uninsured drivers, UM and UIM could be life-saving.

State Requirements for UM and UIM Coverage

It’s important to know your state’s requirements for Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage. Rules can differ a lot depending on where you live. So, understanding what your state needs can help you meet the law and stay safe if there’s an accident.

States That Require Uninsured Motorist Coverage

More than 20 states in the US say you must have uninsured motorist coverage12. For example, Mississippi, with about 29.4% of drivers not insured, shows why this is so important12. Looking at it nationally, there are about 28 million people driving without insurance. That’s around 12.6% of all drivers. This underlines why these rules are key.

States That Require Underinsured Motorist Coverage

In some areas, you need underinsured motorist coverage as well as uninsured motorist coverage. Each state decides based on factors like a 13% national average of drivers without insurance12. Noting that this number can be higher in certain places, over 22 states see more uninsured drivers than the average12.

Optional States and Their Guidelines

Where UM and UIM are optional, getting this coverage is still a good idea. It can be surprisingly affordable. For just an extra $5 to $10 a month, you can have uninsured motorist coverage in many places12. Even when it’s not needed, choosing this type of coverage can save you money.


What is the difference between uninsured and underinsured motorist coverage?

Uninsured motorist (UM) coverage protects you if you’re in a crash with a driver who has no insurance. It covers costs such as medical bills and fixing your car. Underinsured motorist (UIM) coverage is for instances where the other driver’s insurance isn’t enough. It helps pay for big medical bills or a lot of car damage.

What types of damages does uninsured motorist coverage pay for?

UM coverage takes care of medical bills, car repairs, and in some cases, lost wages and pain from the accident. It’s especially helpful in hit-and-runs or with drivers who have no insurance.

When is it necessary to use uninsured motorist coverage?

You should use UM coverage when hit by an uninsured driver or in a hit-and-run. It helps you get compensation for the damages in these cases.

What are the benefits of underinsured motorist coverage?

UIM coverage steps in when the other driver’s insurance isn’t enough. It helps pay for medical bills, car repairs, and other costs from the accident. This can prevent you from paying it all yourself.

How do I file a claim for uninsured or underinsured motorist coverage?

To file, contact your insurance and give details on the accident and driver if you have them. Also, show your expenses. The insurer will help you following the state and their own guidelines.

What are the state requirements for uninsured and underinsured motorist coverage?

Stipulations vary by state; some demand UM or UIM while others don’t. Check with your DMV or insurance to understand your state’s rules. It’s important to follow these for legal and financial safety.

How can I determine the right policy limits for UM and UIM coverage?

Figure out your vehicle’s value and typical local medical expenses. Also, consider state laws. Talk to an insurance expert for advice that fits your situation best.

What happens if I don’t have uninsured or underinsured motorist coverage?

Without UM or UIM, you might have to pay a lot for medical bills, car repairs, and other costs from an accident with an uninsured or underinsured driver. These types of coverage are very important for financial safety in these scenarios.

Are uninsured and underinsured motorist coverages expensive?

The cost of UM and UIM depends on your driving record, where you live, and your coverage limits. They are usually affordable and provide a big safety net, making them a smart choice.

Source Links
  1. UM/UIM: What Is Uninsured Motorist Coverage? – https://www.progressive.com/answers/uninsured-motorist-insurance/
  2. Uninsured Motorists – https://www.Joyelawfirm.com/accidents/car-accident-lawyer/uninsured-underinsured-motorists/
  3. Uninsured & Underinsured Motorist Coverage ~ Important Facts – https://www.geico.com/information/aboutinsurance/auto/uninsured-underinsured-motorist/
  4. Uninsured vs. Underinsured Coverage – https://www.progressive.com/answers/uninsured-vs-underinsured-coverage/
  5. Underinsured Vs. Uninsured Motorist – https://www.amfam.com/resources/articles/understanding-insurance/underinsured-vs-uninsured-motorist-coverage
  6. PDF – https://www.insurance.maryland.gov/Consumer/Documents/publications/ConsumerAdvisory-Uninsured-Motorist-Coverage-682022.pdf
  7. Automobile Insurance Text Version – https://www.insurance.ca.gov/01-consumers/105-type/95-guides/01-auto/auto101.cfm
  8. Uninsured vs. Underinsured Motorist: In CA, It’s All the Same | Jurewitz Law Group Injury & Accident Lawyers – https://www.jurewitz.com/articles/uninsured-vs-underinsured-in-ca-its-the-same/
  9. Do You Need Uninsured / Underinsured Motorist Insurance? – https://www.schollelaw.com/auto-accidents/do-you-need-uninsured-underinsured-motorist-insurance
  10. What’s the Difference between Uninsured and Underinsured? – https://turbaklaw.com/uninsured-vs-underinsured-whats-difference/
  11. Uninsured Motorists – https://www.joyelawfirm.com/accidents/car-accident-lawyer/uninsured-underinsured-motorists/
  12. Revealed – US states that require uninsured motorist coverage – https://www.insurancebusinessmag.com/us/guides/revealed–us-states-that-require-uninsured-motorist-coverage-417485.aspx
Rocky Horton

Rocky Horton


Rocky Horton is a health and safety expert from Chapel Hill, NC. He is the founder of AccidentAdvisor and has been featured in Forbes, Bloomberg, and other publications. Learn more.