Key Takeaways
- Roughly 1 in 8 U.S. drivers is uninsured, according to the Insurance Research Council.
- UM coverage applies when the at-fault driver carries no insurance; UIM applies when their limits fall short of your damages.
- Both coverages also typically apply in hit-and-run accidents where the other driver cannot be identified.
- Many states require insurers to offer UM/UIM coverage, and some mandate that drivers carry it.
- Policy limits, deductibles, and exclusions vary — reading your declarations page is essential.
Uninsured & Underinsured Motorist Coverage
Uninsured motorist (UM) coverage pays for your injuries and sometimes property damage when you're hit by a driver who has no auto insurance at all. Underinsured motorist (UIM) coverage steps in when the at-fault driver has insurance, but their policy limits aren't high enough to cover your full losses. Together, these coverages protect you from the financial consequences of someone else's inadequate insurance.
UM and UIM are typically split into bodily injury (UMBI/UIMBI) and property damage (UMPD/UIMPD) sub-coverages, each with its own limits. Many states mandate one or both types, though requirements and minimum limits vary by jurisdiction.
Why This Coverage Exists
The premise of liability-based auto insurance is straightforward: if you cause an accident, your insurance pays the other party's damages. That system works only when every driver actually carries adequate coverage. In practice, millions do not.
The Insurance Research Council has estimated that approximately one in eight U.S. drivers operates without any auto insurance. In some states, that share is considerably higher. Even among insured drivers, many carry only the state-mandated minimum liability limits — amounts that can fall far short of real-world medical bills, lost wages, and vehicle repair costs after a serious crash.
Uninsured and underinsured motorist coverage was developed specifically to address this gap. Rather than leaving an innocent driver financially exposed because the at-fault party made a different choice, UM and UIM coverage allow your own insurer to step in and pay what the responsible driver cannot.
1 in 8
U.S. drivers estimated to be uninsured
According to the Insurance Research Council's periodic studies on uninsured motorists.
~$900
Average added annual cost uninsured drivers impose on insured households
The Insurance Research Council has estimated that uninsured drivers add roughly this amount in cumulative costs to insured policyholders over time through higher premiums.
29 states
States that require UM bodily injury coverage
As of widely cited industry analyses; exact counts shift with legislation, so verify current requirements with your state's department of insurance.
For a broader grounding in how these coverages fit into the larger insurance picture, see our explanation of the core coverage types and the auto insurance terms reference guide.
What Each Coverage Type Pays
UM and UIM coverage each divide into two sub-types: bodily injury and property damage.
- Uninsured Motorist Bodily Injury (UMBI): Covers medical expenses, rehabilitation costs, lost wages, and pain-and-suffering damages for you and your passengers when the at-fault driver is uninsured.
- Uninsured Motorist Property Damage (UMPD): Pays for repairs to your vehicle — and sometimes other property — when caused by an uninsured driver. Not all states require this sub-coverage, and some policies apply a deductible to it.
- Underinsured Motorist Bodily Injury (UIMBI): Activates when the at-fault driver's liability limits are exhausted before your covered losses are fully paid. Your UIM coverage pays the difference up to your own policy's limit.
- Underinsured Motorist Property Damage (UIMPD): Less common than UIMBI, this sub-coverage addresses vehicle damage costs that exceed the at-fault driver's property damage liability limit.
One important nuance: UIM coverage does not simply add on top of the at-fault driver's policy. In most states, UIM pays the gap between what the other driver's insurance paid and your UIM limit — not your UIM limit on top of everything else. Always read your declarations page carefully, and ask a licensed agent if you're unsure how your policy calculates this.
Hit-and-Run Accidents and UM Coverage
Many drivers don't realize that UM coverage typically extends to hit-and-run accidents. If another vehicle strikes yours and the driver flees before exchanging information, your insurer generally treats the unknown driver as an uninsured motorist.
There are important caveats. For property damage specifically, some policies require physical contact between vehicles — meaning a driver who runs a red light and causes you to swerve into a barrier without actually hitting your car may not trigger UMPD coverage. Bodily injury claims from hit-and-runs are handled more consistently across policies, but documentation — police reports, witness statements, photos — is critical to support any claim.
Common misunderstandings about what car insurance covers often include assumptions about hit-and-run scenarios — it's worth reviewing what your specific policy actually says.
Choosing Coverage Limits and Understanding Exclusions
UM and UIM limits are typically expressed as split limits (e.g., $100,000 per person / $300,000 per accident) or combined single limits. As a general principle — not a personal recommendation — carrying limits that reflect realistic medical and income-replacement costs in your area gives you more meaningful protection than minimum-required amounts.
Common exclusions and restrictions to review in your policy include:
- Whether UM/UIM applies when you're a pedestrian or cyclist struck by a vehicle
- Stacking rules — whether you can combine limits across vehicles or policies
- Arbitration or consent-to-settle clauses that govern how disputes are resolved
- Coordination-of-benefits rules when health insurance also pays some costs
Understanding how UM/UIM interacts with your broader policy is part of knowing what full coverage versus minimum coverage actually means for your situation. This article is general educational information, not personalized insurance advice. Coverage terms, exclusions, and regulations vary by insurer and by state — consult a licensed insurance professional and read your actual policy documents before making coverage decisions.
This article is for informational purposes only and does not constitute personalized insurance, financial, or legal advice. Coverage availability, requirements, and terms vary by state and insurer. Consult a licensed insurance agent or adviser and review your policy documents for guidance specific to your situation.