Uninsured and Underinsured Motorist Coverage

Uninsured and underinsured motorist coverage reimburses you if a driver who doesn’t have car insurance — or doesn’t have sufficient coverage limits — hits you and can’t pay your medical or repair bills.

What is uninsured motorist (UM) coverage?

Uninsured motorist coverage protects you if another driver hits you but doesn’t have liability coverage. It also protects you if you’re the victim of a hit-and-run accident. UM coverage is required only in certain states.

You might be thinking, don’t most states require drivers to carry at least some liability car insurance coverage? Yes, they do. Still, millions of Americans go without. In fact, approximately one in eight U.S. drivers is uninsured, according to the Insurance Information Institute.

What happens if you’re in an accident with an uninsured motorist and you don’t have UM coverage? You’ll have to pay your medical and vehicle-repair bills out of your own pocket.

What is underinsured motorist (UIM) coverage?

Underinsured motorist coverage protects you if you’re hit by a driver who has some liability car insurance, but not enough to cover your repair or medical costs. Like UM coverage, UIM is not required in every state.

So, if you decide not to buy UIM coverage and you’re in an accident caused by an underinsured motorist, you’ll likely have to pay at least some of your medical and repair bills with your own money. The at-fault driver’s insurance will cover those bills up to their policy’s limits, but you’ll need to cover the rest.

Uninsured (UM) vs. underinsured (UIM) motorist coverage

Both types of coverage are usually broken into two parts: bodily injury and property damage. Here’s what that means:

• Uninsured motorist bodily injury coverage (UMBI): helps pay your medical bills if an uninsured driver causes an accident that injures you. It also helps pay the medical bills of your injured passengers.
• Underinsured motorist bodily injury coverage (UIMBI): if the driver who caused the crash has some liability car insurance, but not enough to cover your medical bills, this coverage takes care of that gap.
• Uninsured motorist property damage coverage (UMPD): helps to repair your car or other property if an uninsured driver hits and damages it.
• Underinsured motorist property damage coverage (UIMPD): protects you against at-fault drivers who have some liability insurance, but not enough to cover your repair bills.

Three more things to keep in mind about UMBI, UMPD, UIMBI and UIMPD coverage:

• UMBI and UIMBI coverage usually don’t come with deductibles.
• UMPD and UIMPD coverage typically do come with deductibles.
• Some states require drivers to have all of these coverage types. In other states, they’re all optional. And several states fall somewhere in the middle.

Do you need uninsured and underinsured motorist coverage?

Twenty-two states plus the District of Columbia require drivers to carry some amount of UM coverage, UIM coverage or both. However, in states with more uninsured or underinsured drivers, the cost of UM/UIM tends to be higher.

**New Jersey only requires drivers to buy this coverage if they buy a standard policy.

In every other state, uninsured and underinsured motorist coverage is optional.

You should also consider both coverages if you live in a state with a high population of uninsured drivers. Some states, like New Jersey, have a very low rate of uninsured drivers. According to the Insurance Information Institute, only 3.1% of New Jersey motorists are uninsured. However, if you live in Mississippi, you're in less than ideal circumstances. About 29.4% of drivers in Mississippi do not carry insurance coverage.

If an insufficiently insured driver causes an accident that damages your car or injures you, you could be on the hook for some hefty repair or medical bills. Yes, even if you have full-coverage car insurance.

Should you purchase UM/UIM coverage if…

…you have liability coverage?

While not required, you still might benefit from UM or UIM coverage if you want help paying your own medical or vehicle-repair costs after an uninsured or underinsured driver hits you.

This is because auto liability coverage only protects you if you injure someone else or damage their car in an accident. It doesn’t cover your own repair or medical bills in that situation.

…you have collision coverage?

You likely don’t need UM or UIM coverage if you have collision coverage, but you might want to carry both anyway.

A few reasons you might want collision and UM or UIM coverage:

• Most insurance companies raise your rates after you file a collision claim with them. They likely won’t raise your rates if you file a UM or UIM claim.
• Collision coverage deductibles can be pricey. UM and UIM property damage policies usually have much lower deductibles.

Given the above, if you’re involved in an accident that allows you to file a UM or UIM claim with your insurer rather than a collision claim, doing so should save you money.

…you have health insurance?

You probably don’t need UM or UIM coverage if you have health insurance, but you might want it anyway.

If you have health insurance, it should cover any medical bills that are tied to a car accident. How well it covers them depends on how good your health insurance is, though. Also, even if you have good health insurance, your medical expenses after an accident may be higher than the limits of your plan.

If you buy UM or UIM coverage with a high enough limit, it may help you in this situation. Assuming you’re injured by an uninsured or underinsured driver, of course. In particular, it can:

• Pay your health plan’s deductibles.
• Cover costs related to pain and suffering.
• Cover lost wages.

Which companies sell uninsured or underinsured motorist coverage?

You should be able to buy UM or UIM coverage from most insurance companies.

If you’re having a hard time finding one that sells it, or that sells the amount of coverage you want, start by getting quotes from the biggest and best car insurance companies.

How much does uninsured and underinsured motorist coverage cost?

Buying uninsured and underinsured motorist coverage adds about $20 to your monthly car insurance premium, according to our research. To put it another way, UM and UIM coverage will increase your monthly payments by an average of 13%.

The exact amount depends on a number of factors, including how much UM and UIM coverage you get, where you get it, where you live and more.

For example, here are monthly rate quotes for UM and UIM coverage from three companies in California:

You can buy UM or UIM coverage from most insurance companies.

If you’re having a hard time finding an insurer that sells it, or that sells the amount of coverage you want, start by getting quotes from car insurance companies that write policies nationwide.

Is uninsured and underinsured motorist coverage worth it?

You’ll probably think UM and UIM coverage are worth it if you ever get into an accident with an uninsured or underinsured driver and have to use your own money to pay the resulting medical expenses or repair costs.

Still, you might decide UM and UIM aren’t worth it if you have:

• Ample collision coverage
• A good health insurance plan
• Enough savings to pay needed repair and medical bills out of pocket

How much uninsured motorist coverage should I get?

Most insurance agents recommend buying as much UM and UIM coverage as liability coverage.

So, if your liability coverage limits are 100/300/50, your UM and UIM bodily injury and property damage coverage limits should be the same.

What is stacked uninsured motorist coverage?

If you have UM and UIM coverage for more than one vehicle, you can “stack” their coverage limits.

Stacked car insurance increases your protection against uninsured or underinsured drivers by letting you borrow UM and UIM coverage from another vehicle when needed after an accident.

Methodology

We compared rates from three top auto insurance companies for this sample. These rates are for a 40-year-old male with a clean driving record, 100/300/50 coverage, 100/300 UMBI/UIMBI coverage and $1,000 deductibles for comprehensive and collision coverage. Your rates may vary based on several factors, including car model, where you live, your driving record and more.

References:

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