A Comprehensive Guide to Uninsured and Underinsured Motorist Coverage

You never expect to get into a car crash—until it happens. One minute you’re driving home, the next you’re exchanging insurance info with someone who suddenly admits they don’t have any. Awkward? Definitely. Costly? Potentially.

That’s where uninsured and underinsured motorist coverage steps in. It’s the safety net you hope you never need but will be grateful for after an accident with an uninsured driver. In this guide, we’ll break down what this coverage is, how it works, and why it’s one of the smartest add-ons you can make to your auto insurance policy.

Why This Coverage Matters

Roughly 1 in 8 drivers in the U.S. is uninsured, according to the Insurance Research Council (2023). That means every time you drive, there’s a good chance the person next to you isn’t covered.

Even drivers who do have insurance might only carry the state minimum, which often doesn’t come close to covering real-world costs. A serious crash can easily run into tens of thousands of dollars—far more than what a bare-minimum policy pays.

This is what the UM/UIM coverage does for you:

• Covers medical costs for you and those in your automobile
• Replaces lost income if you can’t work due to an accident
• Repairs or replaces your automobile
• Provides compensation for pain and suffering, if that’s included in your policy

This type of coverage works behind the scenes but will be a big help when something goes wrong.

Uninsured vs. Underinsured: What’s the Difference?

The two terms seem alike, but each provides coverage for different types of accidents.

• Uninsured Motorist (UM) Coverage: Provides coverage in case the at-fault driver is completely uninsured.
• Underinsured Motorist (UIM) Coverage: Covers you in the event the at-fault driver’s liability limits are less than the actual amount of money needed to pay for your losses.

Here’s how it might play out:

If a driver with a $25,000 limit causes an accident that totals your car and leaves you with $50,000 in hospital bills, your UIM limits could provide you with an additional $25,000 in benefits, depending on the UIM limits you have purchased.

What It Covers (and What It Doesn’t)

Typically, UM/UIM policies include coverage for:

• Medical treatment & rehab
• Lost income due to injury
• Pain and suffering
• Property damage (repairs/replacement of your automobile), depending upon the law of the state where the accident occurred, as well as the policies you’ve purchased from your insurer.

It doesn’t typically cover:

• Coverage for damage to other property (fences, mailboxes, etc.)
• Accidents involving hit-and-run drivers in states where UM doesn’t apply

Always check your policy’s fine print. Coverage rules vary widely by state and insurer.

How Much Coverage Should You Have?

Experts recommend matching your UM/UIM limits to your liability coverage. If your policy covers $100,000 per person and $300,000 per accident for liability, mirror that for UM/UIM.

Why? Because the same level of protection you’d give others should protect you, too. Underinsuring yourself defeats the purpose of having safety net coverage.

If you are unsure about purchasing uninsured/underinsured motorist coverage, consider your financial situation and the cost of medical care in your area. A short conversation with your insurance agent can also assist you in finding a balance between cost and protection.

Tips for Using It After an Accident

If you ever need to use this coverage, here’s what to do:

1. Call the police right after the crash to document the scene.
2. Obtain the other driver’s information, even if they admit to being uninsured.
3. Notify your insurer as soon as possible. Delays can complicate claims.
4. Keep records—hospital bills, car repair receipts, and lost wage statements.
5. Stay calm and patient. UM/UIM claims can take time, especially if fault is disputed.

Having good documentation helps speed up the process and ensures you get what you’re owed.

The Bottom Line

You can’t control what other drivers do. But you can control how well you’re protected when they make bad decisions. Uninsured and underinsured motorist coverage helps prevent an accident from becoming a financial disaster.

Quick Recap

• Protects you when the other driver has no or too little insurance
• Covers medical bills, lost wages, and vehicle damage
• Works alongside your main auto policy
• Should match your liability coverage limits