Key Takeaways
- Roughly 1 in 7 U.S. drivers is estimated to carry no auto insurance at all.
- Uninsured motorist coverage pays when the at-fault driver has no insurance; underinsured coverage pays when their limits aren't enough.
- Many states require UM/UIM coverage by law, but minimums vary widely.
- UM/UIM bodily injury covers medical bills, lost wages, and pain and suffering — not just vehicle repair.
- Adding or increasing UM/UIM limits is generally one of the more affordable ways to strengthen your policy.
Uninsured & Underinsured Motorist Coverage
Uninsured motorist (UM) and underinsured motorist (UIM) coverage are auto insurance protections that pay for your injuries and, in some cases, vehicle damage when the driver who caused an accident either has no insurance or doesn't have enough to cover your losses. These coverages step in where the at-fault driver's policy falls short — or is entirely absent. They are separate add-ons or required components of an auto policy, depending on your state.
UM and UIM are often written as separate coverage components: UM/UIM Bodily Injury (UMBI/UIMBI) covering medical expenses and lost wages, and UM/UIM Property Damage (UMPD/UIMPD) covering vehicle repair costs. Policy limits are typically expressed as split limits (e.g., $25,000 per person / $50,000 per accident) or combined single limits.
Why This Coverage Exists
Auto liability insurance is designed so that the driver who causes an accident pays for the other party's losses. That system breaks down the moment an at-fault driver has no coverage — or coverage so thin it barely dents a serious injury claim. That's where uninsured and underinsured motorist coverage comes in.
According to the Insurance Research Council, an estimated one in seven U.S. drivers carries no auto insurance. In some states, that rate is considerably higher. Even among insured drivers, many carry only state-mandated minimums — limits that were often set decades ago and may not reflect modern medical or repair costs.
~1 in 7
U.S. drivers estimated to be uninsured
The Insurance Research Council has consistently estimated the national uninsured driver rate at roughly 12–14% of all motorists.
29
States requiring UM/UIM coverage by law
State mandates vary widely; the remaining states require insurers to offer the coverage but allow drivers to decline it in writing.
$25,000
Common state minimum liability limit per person
Many states set bodily injury minimums at $25,000 per person — a figure that can be exhausted quickly by a single emergency room visit.
UM/UIM coverage exists as a direct answer to this gap. Rather than relying on an unknown stranger's policy to make you whole after a crash they caused, your own insurer steps in and covers what the at-fault driver cannot.
What Each Type Covers
The two coverages are related but address different situations:
- Uninsured Motorist (UM): Activates when the driver who hit you has zero liability insurance. This includes hit-and-run accidents in most states, where the responsible driver flees and can't be identified.
- Underinsured Motorist (UIM): Activates when the at-fault driver has insurance, but their liability limits are insufficient to cover your actual losses. Your UIM coverage bridges the gap between what their policy pays and your total damages, up to your own UIM limit.
Within each type, most policies offer two sub-coverages:
- Bodily Injury (UMBI / UIMBI): Covers medical expenses, hospitalization, rehabilitation, lost wages, and pain and suffering for you and your passengers.
- Property Damage (UMPD / UIMPD): Covers repair or replacement of your vehicle. Not all states require this component, and some drivers with collision coverage may find overlap here — though deductibles and claim processes can differ.
Understanding how these interact with your other coverages — like comprehensive and collision — helps you avoid gaps in your overall protection.
State Requirements and Typical Limits
State law shapes what you're required to carry. Roughly half of U.S. states mandate UM/UIM coverage, several require UM only, and others leave it optional — though insurers in those states are typically required to offer it. Mandatory states vary significantly in their minimum limits.
State Minimums Are a Floor, Not a Recommendation
State-mandated minimum liability limits are the legal baseline — not an indication of what's adequate for your financial situation. Medical costs, rehabilitation, and lost income from a serious accident can quickly exceed standard minimums. Many insurance professionals suggest carrying UM/UIM limits that mirror your own liability limits as a general starting point.
Because state minimums are floor requirements — not recommendations — many drivers choose higher limits voluntarily. A single serious injury accident can generate medical costs far exceeding a $25,000 minimum. Carrying limits that match your liability coverage is a widely cited rule of thumb, though your specific circumstances should drive that decision.
UM/UIM coverage is also relevant for EV owners to consider. As repair and medical costs evolve, the reasoning behind adequate limits applies regardless of vehicle type — something worth keeping in mind if you're exploring EV insurance considerations.
How Claims Work in Practice
Filing a UM/UIM claim follows a similar process to other insurance claims, but with a few distinctions worth knowing:
- Document the scene: Photograph the vehicles, gather witness contact information, and get a police report — especially important in hit-and-run situations where that report may be required to file a UM claim.
- Notify your insurer promptly: Most policies include notification deadlines. Delay can complicate or void a claim.
- Exhaust the at-fault driver's coverage first: For UIM claims, you generally must settle with or receive a judgment against the at-fault driver's insurer before your UIM coverage kicks in. Your insurer may need to consent to that settlement amount.
- Negotiate or arbitrate: If your insurer and you disagree on the payout, many UM/UIM disputes go to arbitration rather than court, depending on your state and policy terms.
Review Your UM/UIM Limits at Renewal
Each policy renewal is a good opportunity to compare your UM/UIM limits against your liability limits and your health insurance deductible. If there's a significant gap, raising your UM/UIM limits is typically one of the more affordable coverage upgrades available. Ask your insurer to quote the difference before deciding.
UM/UIM coverage is one component of a broader policy strategy. For context on how all your coverage pieces fit together — and how your premiums reflect that mix — see our overview of what drives insurance premium changes. If you're also financing a vehicle, you may want to compare how UM/UIM interacts with GAP insurance, which addresses a different financial gap entirely.
This article is for general informational and educational purposes only. It does not constitute legal, financial, or insurance advice. Coverage requirements, terms, and availability vary by state and insurer. Consult a licensed insurance professional to understand your specific options and obligations.