Key Takeaways
- Roughly 1 in 8 drivers on U.S. roads carries no auto insurance at all.
- UM coverage protects you when the at-fault driver is completely uninsured; UIM fills the gap when their limits fall short.
- This coverage can pay for medical bills, lost wages, and pain and suffering — not just vehicle repairs.
- Many states require UM/UIM coverage; even where optional, it's often one of the most practical add-ons available.
- Your own insurer handles the claim, which means you aren't dependent on an at-fault driver's cooperation.
Uninsured & Underinsured Motorist Coverage
Uninsured motorist (UM) coverage pays for your injuries and sometimes property damage when the driver who caused your accident has no insurance at all. Underinsured motorist (UIM) coverage activates when the at-fault driver has insurance, but their policy limits aren't high enough to cover your actual losses. Together, they act as a financial safety net that steps in when the responsible party can't fully pay.
UM and UIM are often sold as a combined endorsement, but some states separate them. Coverage may apply to bodily injury, property damage, or both — depending on your policy and state law.
The Problem It's Designed to Solve
Most people assume that if another driver causes an accident, that driver's insurance will cover their losses. In a straightforward scenario, that's true. But a significant portion of drivers are either completely uninsured or carrying state-minimum liability limits that don't come close to covering a serious accident.
When that happens, you're left trying to recover damages from someone who may have no meaningful financial resources. Filing a lawsuit is an option, but even a favorable judgment doesn't guarantee payment. Uninsured and underinsured motorist coverage exists precisely to prevent that situation from becoming your financial problem.
For a broader look at how this fits into your overall policy, see our introduction to auto insurance for first-time drivers.
1 in 8
U.S. drivers estimated to be uninsured
According to the Insurance Research Council, approximately 12–14% of drivers on American roads carry no auto insurance.
29%
Uninsured driver rate in some states
Uninsured motorist rates vary dramatically by state, with some exceeding 25–29% according to Insurance Research Council data.
How Uninsured vs. Underinsured Coverage Differ
Uninsured motorist (UM) coverage applies when the at-fault driver has zero insurance. This includes most hit-and-run situations, where the responsible driver flees before you can exchange information.
Underinsured motorist (UIM) coverage applies when the at-fault driver does have insurance, but their limits are too low to cover your full losses. For example, if your medical bills total $60,000 and the at-fault driver's liability limit is $25,000, UIM can cover the remaining $35,000 — up to your own UIM policy limit.
The two are often sold together and listed on your declarations page as a combined limit or split limit (e.g., $100,000 per person / $300,000 per accident). Understanding split limits is part of reading any policy clearly — something our guide to core coverage types explains in detail.
Check Your Declarations Page for Both Components
Your policy may list UM and UIM as separate line items or as a combined coverage. Look for 'UMBI' (bodily injury) and 'UMPD' (property damage) to understand exactly what's included. If either is missing and you're in a state where it's optional, ask your agent whether adding it makes sense for your situation.
What It Actually Covers
UM/UIM coverage is broader than many first-time buyers expect. Depending on your state and policy, it can cover:
- Medical expenses — hospital bills, surgery, rehabilitation, and ongoing treatment costs for you and your passengers
- Lost wages — income you couldn't earn while recovering from accident-related injuries
- Pain and suffering — non-economic damages for physical and emotional harm
- Property damage — vehicle repairs, in states and policies that include UM property damage coverage
It's worth noting that UM/UIM for bodily injury and UM for property damage are separate coverage components. Your collision coverage may already address vehicle damage in some cases, but collision requires a deductible — UM property damage sometimes doesn't, making it worth comparing. This overlaps with questions first-time buyers often have; our article on common coverage gaps new drivers miss walks through several of them.
How to Think About This Coverage When Building Your Policy
UM/UIM coverage tends to be relatively affordable compared to the financial exposure it addresses. When you're deciding how much to carry, a practical benchmark is to match your UM/UIM limits to your liability limits — if you've decided $100,000 in liability is appropriate for your situation, the same logic applies to protecting yourself.
Also consider how your health insurance interacts with UM/UIM. If your health plan has high deductibles or limited coverage, UM/UIM bodily injury coverage becomes especially valuable. If you have robust health coverage, you may weigh the two differently — though UM/UIM still covers lost wages and pain and suffering that health insurance won't touch.
State minimums for UM/UIM — where required — are rarely sufficient for a serious accident. The same caution applies to liability minimums generally, which our explainer on minimum vs. full coverage addresses directly. For injury-specific coverage comparisons, see our piece on PIP vs. MedPay, which covers how those options interact with UM/UIM in no-fault states.
This article is for general informational purposes only and does not constitute insurance, legal, or financial advice. Coverage terms, availability, and requirements vary by state and insurer. Consult a licensed insurance professional for guidance specific to your situation.