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What is uninsured and underinsured motorist coverage?

Uninsured motorist insurance is a component of your car insurance, which protects you, your passengers and your car in the event of injury or damage when an at-fault driver has no auto insurance.  Underinsured motorist insurance covers injuries sustained at the hands of a driver who has insurance, but the driver’s policy is insufficient to pay for all your medical expenses.

Uninsured/underinsured motorist coverage is one of four components to a well-rounded auto insurance policy. The other major components are liability, collision /comprehensive and MedPay/PIP.

The national average for uninsured drivers on the road is 12 percent. That might seem like a small number, but that means at a busy intersection, there’s likely to be at least one uninsured driver. In some states, that rates increases significantly. For instance, nearly one in four drivers in Oklahoma is uninsured.

Read on to learn about uninsured and underinsured motorist coverage.

What are the different kinds of UM coverage?

What are ‘Offset’ versus ‘excess’ coverage limits?

Am I required to carry UM/UIM coverage?

State minimum requirements

What if I am the one who is uninsured?

How much can I expect to pay for UM/UIM coverage?

What is a Negligence law?

What is policy stacking?

Won’t my health insurance cover me in a car accident?

What other kinds of coverages comprise an auto insurance policy?

Examples of UM/UIM accidents and claims

What are the different kinds of uninsured motorist and underinsured coverage?

There are four types of uninsured and underinsured motorist coverages, depending on the kind of damages or injuries that occur. Here are the four types:

  • Uninsured motorist bodily injury (UM or UMBI) – covers injuries when you are hit by an at-fault uninsured driver.
  • Uninsured motorist property damage (UMPD) – covers damage to your vehicle when you are hit by an at-fault uninsured driver.
  • Underinsured motorist bodily injury (UIM or UIMBI) – covers injuries when you are hit by an at-fault driver, but only in cases when the at-fault party has insufficient insurance.
  • Underinsured motorist property damage (UNDPD) – covers damage to your vehicle when you are hit by an at-fault driver, but only in cases when the at-fault party has insufficient insurance.

In some states, uninsured motorist and underinsured motorist are bundled together as one coverage, and you will see it listed as UM/UIM. In other states, you can buy UM and UIM as separate coverages.

Uninsured Motorist Bodily Injury Hit and run quote

The most common type, which many states require car owners to carry, is uninsured motorist bodily injury. UM coverage will pay up to your limits – without a deductible – which typically mirror your liability limits (per person and per accident) because UM is basically taking the place of the other driver not having bodily injury liability coverage. Uninsured motorist bodily injury is also used to cover injuries sustained in hit-and-run accidents when the at-fault driver cannot be found.

This typically covers the following people when harmed by an uninsured driver that is legally liable for the auto accident:

  • You
  • Household members (resident relatives)
  • Permissive drivers of your insured vehicle
  • Passengers of your insured vehicle

UM coverages can vary by policy term, but generally include these expenses:

  • Medical expenses
  • Lost wages
  • Pain and suffering
  • Other injury-related expenses

Uninsured motorist coverage ordinarily extends to you and your household members if you’re hit by an uninsured driver as a pedestrian or, in some states, a bicyclist.

Uninsured Motorist Property Damage

While standard UM coverage pays for medical expenses that result from an accident caused by an uninsured driver, there is a separate kind of coverage for damage to your vehicle.

Uninsured motorist property damage coverage, or UMPD, is what pays for repairs to your vehicle if you are struck by an uninsured driver. Unlike UMBI, this coverage doesn't protect against damage caused by hit-and-runs or miss-and-runs (also called “phantom vehicle situation” when another driver causes you to crash but doesn’t actually touch your vehicle) because it would be easy for fraudulent claims to be made. For instance, a driver could have a single-car accident and then claim a hit-and-run so he didn’t have to make a collision claim.

For uninsured motorist property damage, most states have you pick a maximum amount that will be paid out if your car is damagedUMPD limits by an uninsured motorist, similar to how you choose a property damage liability limit for damage you cause others.

UMPD limits vary by state, but are typically low in comparison to collision coverage, which pays up to your car’s actual cash value.

Deductibles are usually due with uninsured motorist property damage coverage, and tend to range from $100 to $500. UMPD coverage is generally purchased by drivers who don't have collision coverage, as carrying both collision and UMPD is redundant.

Why carry UMPD if you don’t think your car is worth enough to buy collision coverage? Because some states require you to carry UMPD. And if you do carry both coverages, some of those states allow you to use UMPD to pay the deductible of your collision coverage when hit by an uninsured motorist.

Underinsured Motorist coverage

Underinsured motorist is similar to uninsured motorist coverage, but instead covers you when the at-fault driver has insufficient insurance to fully compensate you. Insurance companies generally define underinsured as anyone who is at-fault and has bodily injury liability limits that are less than your UIM limits and the limits are not enough to cover the losses of those injured.

Underinsured motorist property damage (UNDPD) is much less common than its liability counterpart. Since collision coverage generally offers better protection than UNDPD, underinsured motorist property damage is predominantly sold when required by the state and bundled with uninsured motorist property damage.

Your car insurance company won’t pay out for damages that have already been paid for by another party; therefore, many policies require that you inform them in writing of any tentative settlement with the at-fault uninsured driver or you must obtain your insurer’s permission before filing a claim (within the allowed timeframe) with the underinsured driver’s insurer. Failure to do so may result in a complete loss of your benefits or could be considered insurance fraud.

‘Offset’ versus ‘excess’ coverage limits

In some states, you have the option of carrying “offset” or “excess” UIM coverage.  If your insurer offers both types, you choose at the onset of your policy which type you want to carry. Excess coverage leaves the possibility that your insurance company could have to pay out more, so it costs more than offset coverage.  

Offset or Difference in limits coverage -- In most states, underinsurance motorist bodily injury coverage is allowed to have a reducing clause that allows your insurance company to reduce, or offset, your payout by any amounts recovered from another party’s liability policy. 

                Example: You're in an accident and end up with $50,000 in medical bills. The other driver's insurance only pays for $20,000. You need to have $50,000 in UIM coverage in order to reap the additional $30,000 in benefits. If you only have $30,000 in UIM coverage, you only get $10,000, because the $20,000 settlement would be deducted from your UIM policy limits.

Excess coverage – In some states, UIM coverage is considered "excess coverage" – above and beyond what's paid by the other driver's insurance. In states with this type of UIM coverage, your limits are not reduced by what the at-fault’s insurer has paid you, and instead your UIM coverage is in addition to it. 

            Example: You are in an accident with total damages of $35,000. The other driver's insurer pays $20,000, and your UIM limit is $20,000. You receive the $15,000 payout from your UIM policy.

Am I required to carry uninsured/underinsured motorist coverage?

The requirement for uninsured motorist coverage all depends on your state’s minimum car insurance requirements.

  • In more than half of U.S. states, you are required to carry uninsured motorist coverage.
  • In some states, a combination of uninsured and underinsured motorist coverage is required.
  • In some states others, you must carry UM but can skip UIM coverage.
  • In most states that don’t require uninsured motorist coverage, you must still be offered the coverage. It might be necessary to reject it in writing as the coverage may be automatically included on your policy.

Locate your state in the table below to view the UM/UIM requirements.

UM/UIM State minimums

StateUM/UIMUM/UIM Limits per person / per incidentUMPD
Alabama Not required; may reject in writing n/a Not offered
Alaska Not required; may reject in writing n/a May reject in writing
Arizona Not required; may reject in writing n/a Not offered
Arkansas Not required; may reject in writing n/a May reject in writing
California Not required; may reject in writing n/a May reject in writing
Colorado Not required; may reject in writing n/a Not required
Connecticut UM/UIM 20/40 Not offered
Delaware* Not required; may reject in writing n/a Not required
District of Columbia UM 25/50 $5,000
Florida Not required; may reject in writing n/a Not offered
Georgia Not required; may reject in writing n/a May reject in writing
Hawaii Not required; may reject in writing n/a Not required
Idaho Not required; may reject in writing n/a Not offered
Illinois** UM 25/50 Not required
Indiana Not required; may reject in writing n/a May reject in writing
Iowa Not required; may reject in writing n/a Not offered
Kansas UM/UIM 25/50 Not offered
Kentucky Not required; may reject in writing n/a Not offered
Louisiana Not required; may reject in writing n/a Not required
Maine UM/UIM 50/100 Not offered
Maryland UM/UIM 30/60 $15,000
Massachusetts UM/UIM 20/40 Not offered
Michigan Not required; may reject in writing n/a Not offered
Minnesota UM & UIM 25/50 Not offered
Mississippi Not required; may reject in writing n/a May reject in writing
Missouri UM 25/50 Not offered
Montana Not required; may reject in writing n/a Not offered
Nebraska UM &UIM 25/50 Not offered
Nevada Not required; may reject in writing n/a Not offered
New Hampshire UM/UIM 25/50 Not required
New Jersey UM & UIM 15/30 $5,000
New Mexico Not required; may reject in writing n/a Not required
New York UM 25/50 Not offered
North Carolina UM 30/60 $25,000
North Dakota UM &UIM 25/50 Not offered
Ohio Not required n/a Not required
Oklahoma Not required; may reject in writing n/a Not offered
Oregon UM 25/50 Not required
Pennsylvania Not required; may reject in writing n/a Not offered
Rhode Island*** Not required; may reject in writing n/a May reject in writing
South Carolina UM 25/50 $25,000
South Dakota UM & UIM 25/50 Not offered
Tennessee Not required; may reject in writing n/a May reject in writing
Texas Not required; may reject in writing n/a Not required
Utah Not required; may reject in writing n/a May reject in writing
Vermont UM/UIM 50/100 $10,000
Virginia UM/UIM 25/50 $20,000
Washington Not required; may reject in writing n/a Not required
West Virginia UM 25/50 $25,000
Wisconsin UM 25/50 Not offered
Wyoming Not required; may reject in writing n/a Not offered

* Delaware requires that if you buy UM, you must also buy UMPD of $5,000.

** Illinois requires UIM coverage if you purchase higher limits of UM coverage.

*** Rhode Island does not require UM/UIM unless you buy higher liability limits, then it is required as part of your policy.

What if I am the one who is uninsured?

Driving without car insurance is risky business. There are several possible repercussions and negative outcomes from driving without auto insurance:

  • Personal liability. Without insurance, if you cause an accident, you're personally liable for injuries and damage to others -- not to mention your own medical and car-repair bills.
  • Required by law. Unless you live in New Hampshire -- the only state that doesn't require drivers to carry auto liability insurance -- you're subject to legal penalties if you drive without it. (But even in New Hampshire if you cause an accident you have to be able to financially cover the damages you cause, or else you can be penalized.)
  • Penalties, fines and possible jail time. Potential punishment for driving uninsured varies widely. Most states will penalize you with a fine, but some could suspend your driver’s license, require you to do community service or sentence you to jail.

In some states you don’t even need to be caught driving without insurance to be penalized.  If your state keeps an insurance database and sees that your vehicle isn’t insured, it may be able to fine you and take other measures, such as suspending your registration. Read more about state penalties for driving without insurance.

How much can I expect to pay for UM/UIM coverage?

The cost of uninsured and/or underinsured motorist coverage can vary greatly, as multiple factors contribute to the coverage’s cost. Generally, you can expect UM/UIM coverage to be about 10 percent of the total premium cost.

Here are some of the major factors that can affect the rates:

In the chart below, Insure.com identified the average annual UM coverage rate of the 20 most popular cars in seven states using available rates from eight national insurance carriers.   

State

Average price of UM coverage

California

$105

Florida

$267

Massachusetts

$18

Maine

$23

Ohio

$46

Texas

$110

Oregon

$49

As evident between Massachusetts and Florida, the cost can vary wildly by location. Massachusetts boasts the lowest percentage of uninsured motorists in the country at around 4 percent, while Florida has the second-worst ranking with 24 percent. But insurance companies can also differ drastically in rates.  In order to get the cheapest car insurance for your situation, comparing carriers is critical. Use Insure.com’s tools to find the average insurance rate by vehicle or rates by state to discover a ballpark of what you can expect to pay for basic coverages before shopping around.

What is a Negligence law?

The uninsured driver that hit you must be found at fault for the incident for your UM coverage to kick in. Depending on the negligence laws of your state, your UM payment could be reduced or eliminated if you’re found partially at fault.

  • Comparative negligence - you can only collect damages if your degree of fault doesn’t surpass that of the other driver. If your insurance company finds that you were 20 percent responsible for the accident, your UM policy would only pay up to 80 percent of your damages up to your policy limits.
  • Contributory negligence - prevents you from receiving any compensation if you’re found to be at fault at all.
  • Modified negligence – you cannot receive compensation if you’re found 50 percent or more at fault. With the 51 percent rule, you can recover if you’re 50 percent or less at fault, but not if you’re 51 percent or more at fault. 

Negligence laws by state

State Law
Alabama Contributory Negligence
Alaska Comparative Negligence
Arizona Comparative Negligence
Arkansas Modified Comparative Negligence – 50% Rule
California Comparative Negligence
Colorado Modified Comparative Negligence – 50% Rule
Connecticut Modified Comparative Negligence – 51% Rule
Delaware Modified Comparative Negligence – 51% Rule
District of Columbia Contributory Negligence
Florida Comparative Negligence
Georgia Modified Comparative Negligence – 50% Rule
Hawaii Modified Comparative Negligence – 51% Rule
Idaho Modified Comparative Negligence – 50% Rule
Illinois Modified Comparative Negligence – 51% Rule
Indiana Modified Comparative Negligence – 51% Rule
Iowa Modified Comparative Negligence – 51% Rule
Kansas Modified Comparative Negligence – 50% Rule
Kentucky Comparative Negligence
Louisiana Comparative Negligence
Maine Modified Comparative Negligence – 50% Rule
Maryland Contributory Negligence
Massachusetts Modified Comparative Negligence – 51% Rule
Michigan Modified Comparative Negligence – 51% Rule
Minnesota Modified Comparative Negligence – 51% Rule
Mississippi Comparative Negligence
Missouri Comparative Negligence
Montana Modified Comparative Negligence – 51% Rule
Nebraska Modified Comparative Negligence – 50% Rule
Nevada Modified Comparative Negligence – 51% Rule
New Hampshire Modified Comparative Negligence – 51% Rule
New Jersey Modified Comparative Negligence – 51% Rule
New Mexico Comparative Negligence
New York Comparative Negligence
North Carolina Contributory Negligence
North Dakota Modified Comparative Negligence – 50% Rule
Ohio Modified Comparative Negligence – 51% Rule
Oklahoma Modified Comparative Negligence – 50% Rule
Oregon Modified Comparative Negligence – 51% Rule
Pennsylvania Modified Comparative Negligence – 51% Rule
Rhode Island Comparative Negligence
South Carolina Modified Comparative Negligence – 51% Rule
South Dakota Comparative Negligence
Tennessee Modified Comparative Negligence – 50% Rule
Texas Modified Comparative Negligence – 51% Rule
Utah Modified Comparative Negligence – 50% Rule
Vermont Modified Comparative Negligence – 51% Rule
Virginia Contributory Negligence
Washington Comparative Negligence
West Virginia Modified Comparative Negligence – 50% Rule
Wisconsin Modified Comparative Negligence – 51% Rule
Wyoming Modified Comparative Negligence – 51% Rule

What is policy stacking?

Policy stacking is an option that allows you to increase your UM bodily injury and UIM bodily injury coverage limits by the number of cars you have insured with your carrier. For this heightened level of protection, you will pay a higher amount for your UM and UIM coverages.

Example: If you have four cars on your auto policy, each with UM limits of $100,000, you can choose to stack these and combine the coverage limits for a total limit of $400,000.

A reason to stack your coverages is to obtain much higher limits for UM and UIM coverage.  However, if you’re pinching pennies, you may want to hold off on stacking since you’ll pay more for the privilege (because your car insurance company could possibly have to payout more if you used your UM/UIM coverage). 

Stacking is not allowed in every state.   And, in states that do allow it, not all car insurance companies offer it.  Find out more about policy stacking and which states it’s allowed.

Won’t my health insurance cover me in a car accident?

If you’re in an auto accident caused by an uninsured motorist and you don't have UM coverage, your health insurance will generally pay for your medical bills related to that car accident, with you paying for any deductible and co-payment amounts. That can easily add up to a hefty amount if you require a hospital stay. If you have UM/UIM coverage, that pays for health care expenses before your health insurance kicks in.

Your health insurance won't pay for lost wages if you miss work or for pain and suffering resulting from the crash. Lost wages and pain and suffering are paid for by the at-fault driver's liability insurance. If the other driver doesn't have liability insurance, or doesn't have enough of it, you're out of luck — unless you want to pursue the matter in court.

As with any other car accident, before you can make a claim on UM/UIM coverage, car insurance companies will want to investigate the claim. They will confirm that the other motorist is uninsured or underinsured and that he or she is at fault.

Even if you live in a no-fault state, it may still be a good idea to buy UM/UIM coverage. In a no-fault state, you have to file a claim with your own insurer — no matter who is to blame for the accident — and your right to sue the other party is restricted. However, drivers are allowed to sue for severe injuries and pain and suffering if the case meets certain conditions. If the other driver is uninsured or underinsured, and you win a lawsuit against him, there may be nothing to collect.

What other kinds of coverages comprise an auto insurance policy?

In addition to UM/UIM, there are three additional main components of an auto insurance policy. These components can vary depending on the auto insurance requirements in your state.

  • Liability - The main component of any auto insurance required by states in order for drivers/car owners to have a way to compensate those that they harm with a vehicle.
  • Personal injury protection (PIP) or MedPay - These coverages pay for your auto accident related injuries, regardless of fault, up to your limits. Most states that require PIP are termed “no fault” states and your PIP coverage is primary, even if another party is at fault and carries bodily injury liability coverage.
  • Collision and Comprehensive – The two types of physical damage coverage that you can add to your policy to protect your vehicle. These coverages are optional in most instances, according to state laws. Collision covers damage to your car if it hits or is hit by another car or object. Comprehensive replaces stolen cars and covers damage to your car from fire, vandalism, and natural disasters.

Examples of UM/UIM accidents and claims

1.      During your commute to work, you are rear-ended by a driver with no insurance. Your car is badly damaged, and you opt to get checked out at the hospital.

Since the other driver is uninsured, you have to look to your own insurance policy for help. If you have uninsured motorist bodily injury, you can make a claim for your medical expenses, lost wages and pain and suffering if your injury calls for it. Without UMBI coverage, you could use MedPay or PIP coverage, if you have it, or your own health insurance – but you’ll have to pay your deductible and co-payments. For your vehicle’s damages you could make an uninsured motorist property damage (UMPD) claim or a collision claim. 

2.      You are a pedestrian in a crosswalk, and you are struck by a car making a right on red. You are taken to the hospital. The driver has no insurance.

If you have UMBI, you can make a claim with your insurer. The insurer may then pursue the driver to ask for reimbursement for the monies it paid out. If you do not have UMBI, then your health insurance should cover your medical expenses, less any co-pays or deductibles that are due.

If you do not have UMBI or other medical insurance to pay your medical bills, you would need to pursue the driver in court to pay for your medical and other expenses incurred due to the incident.

3.      When leaving a lunch date, you find your car has been struck in the parking lot. The driver at fault left no information. 

Without recourse to take against an unknown at-fault party, you need to have collision coverage to make a claim. If you have UMPD, it’s doubtful that you could make a claim since hit-and-run accidents generally aren’t covered. In a few states, if you have an unbiased witness to the event that will testify to it, you can make a UMPD claim.

 

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