Uninsured and Underinsured Motorist Coverage Explained

UM/UIM coverage: what you need to know

The problem: millions of uninsured and underinsured drivers

The Insurance Research Council estimates that about 12–14% of US drivers — roughly one in eight — are uninsured at any given time. In some states (Florida, Mississippi, New Mexico) the figure is closer to 20–26%. Even among insured drivers, many carry only state-minimum liability, which — as of 2026 — ranges from as low as 25/50/25 in some states to 50/100/25 in others. State minimums are often exhausted by a single serious injury.

If an uninsured or underinsured driver hits you, their insurance either doesn't exist or doesn't cover your full losses. Without UM/UIM coverage, you either sue them personally (and collect nothing if they have no assets) or absorb the loss yourself.

Uninsured motorist (UM) coverage: the basics

UM coverage steps into the at-fault driver's place when they have no insurance. It covers:

1. UMBI (bodily injury): your medical expenses, rehabilitation, lost wages and pain-and-suffering damages if you're injured by an uninsured driver.
2. UMPD (property damage): repair or replacement costs for your vehicle. Not available in all states. Note: many UMPD policies exclude pure hit-and-run (no identified driver) — check your state and policy.

UM coverage applies in your car, in someone else's car (as a passenger), and often as a pedestrian or cyclist hit by an uninsured vehicle.

Underinsured motorist (UIM) coverage: filling the gap

UIM coverage applies when the at-fault driver has insurance — just not enough. Here's how it works in practice:

Say a driver with a $25,000 per-person bodily injury limit causes an accident that results in $80,000 of medical bills and lost wages for you. Their insurer pays its $25,000 limit. Your UIM coverage (if you carry $100,000) pays the remaining $55,000, up to the difference between their limits and yours.

Different states handle UIM differently — some use an 'excess' model (UIM pays only after the at-fault limits are fully exhausted) and others use a 'gap' model (UIM pays the difference between actual damages and the at-fault policy's limit, regardless of how much that policy pays).

Which states require UM/UIM?

UM/UIM coverage is mandatory in 22 states plus Washington, DC: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, Wisconsin and DC. Virginia increased its required UM/UIM limits to 50/100 in 2025 alongside its liability increase.

Even where it's optional, the cost is low and the protection substantial — adding 100/300 UM/UIM to a policy typically costs $50–$150/year.

How much UM/UIM coverage should you carry?

The standard recommendation: match your UM/UIM limits to your liability limits. If you carry 100/300/100 liability, carry 100/300 UM/UIM. This ensures symmetry — the protection you extend to others is matched by the protection you receive from others.

UM vs collision for vehicle damage

If you have collision coverage, it will also pay for your vehicle damage after an accident regardless of fault — but it carries your collision deductible. UMPD often has a lower deductible ($200–$500) and in some states is more favourable for not-at-fault claims. If you don't have collision coverage, UMPD (where available) is your only route to vehicle repairs after an uninsured driver hits you.