Uninsured motorist coverage provides an additional layer of protection for you and your passengers if you are injured in a car accident where the other driver is at fault driver and uninsured. Although car insurance is mandatory in 48 out of 50 states, as many as 15% of all drivers don’t have auto insurance. To protect yourself financially in the event of a car accident with an uninsured driver, you should consider including uninsured motorist coverage (UM) when searching for the right auto insurance policy.

What is uninsured motorist coverage all about and what does it include?

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What is uninsured motorist coverage?

Uninsured motorist coverage, or uninsured motorist bodily injury coverage (UMBI), pays for your medical expenses stemming from an accident caused by an uninsured driver.

Uninsured motorist coverage reimburses you for your expenses stemming from an accident caused by an uninsured driver. Rather than having to sue the driver who doesn’t have coverage, your own car insurance company covers the costs instead.

Without this coverage, you can attempt to use your health insurance (if you have health insurance), however, health insurance companies typically only make payments for your medical bills from a car accident after the car insurance limits are met. Even then, you are responsible for the deductibles and copays, which all add up fast.

The other option is to sue the driver who didn’t have car insurance, but that is its own long and costly headache. With UM coverage, your own car insurance company will handle the claim and make payments on your behalf.

What does uninsured motorist insurance cover?

If you need to make a claim due to an accident with an uninsured motorist, here are the kinds of expenses that would be considered eligible.

Medical bills

Medical costs from a few stitches to life-saving surgery, are covered with UM coverage. In this situation, other coverages like

MedPay

and

PIP (personal injury protection)

will payout first, but they tend to have much lower coverage limits.

Lost wages

Your lost wages resulting from a car accident can sometimes be paid out through your UM coverage, depending on the state and your insurance provider. If you can’t work due to your injury, contact your claims adjuster to review your options.

Funeral expenses

If the worst-case scenario happens due to a crash with an uninsured driver who’s at fault, funeral expenses are eligible to be paid through your UM coverage.

But what if the driver doesn’t stick around after hitting your car? Say you’re crossing at an intersection on foot when a driver clips you with their car. Or maybe you’re the victim of a hit and run while driving. Uninsured motorist coverage is one potential way to get your related expenses covered if the

hit-and-run

driver gets away.

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What is underinsured motorist coverage?

Suppose you’re the victim of a car accident with someone who does have insurance but not enough insurance to cover all of your associated costs. That’s where underinsured motorist coverage comes into play.

With underinsured motorist coverage or UIM, your insurance picks up the costs where the at-fault driver’s

liability car insurance

leaves off. At its core, underinsured motorist coverage, also known as underinsured motorist bodily injury coverage (UIMBI), kicks in when the at-fault driver doesn’t have enough liability coverage to make reparations for an accident’s damage.

If you’re in an accident caused by someone who only has the state minimum liability insurance, say $25,000 for

bodily injury liability coverage

, and your medical bill is $37,000, your UIM coverage would pick up the remaining $12,000 difference between your expenses and the other driver’s coverage limit.

MORE:

No-fault insurance explained

The differences between uninsured and underinsured motorist coverage

Although they are similar, UM and UIM are two separate insurance coverages. Your auto insurance provider might sell them as a package deal, but they are individual products. Here are the key differences:

How it works	Uninsured motorist liability coverage	Underinsured motorist liability coverage

When does it pay out?	Your insurance provider will make payments from this coverage if the at fault driver does not have liability coverage	Your insurance provider will make payments from this coverage if the at fault driver’s bodily injury liability limits are lower than your medical expenses
Does it cover hit-and-run?	Yes	No
Does it cover your car?	No	No

Who is covered under uninsured and underinsured motorist coverage?

For both coverages, you and your passengers are covered up to the limits of your policy. Household family members may even be covered when they are a pedestrian or riding in someone else’s car. Once your policy limits are exhausted, your health insurance will kick in for you, and your passengers may have coverage from their own car insurance policies.

What is uninsured motorist property damage coverage?

One topic we haven’t reviewed yet, is who pays to fix your car if you are hit by someone without insurance. This is where uninsured motorist property damage (UMPD) is helpful.

UMPD will pay for car repairs or replacement, and in most cases your personal property if damaged in an accident where the uninsured driver is at fault. In this case, personal property usually means the property with you in the car that may have been destroyed, like your groceries, your leather jacket, or maybe your computer and textbooks for school.

However, this coverage can get a little tricky. Some states, like

Texas

, only allow a UMPD payout when the at fault driver is identified as not having auto insurance. This means that in Texas, hit-and-runs are generally not covered unless the driver is identified. In this case, you would need

collision coverage

to pay for your vehicle repairs.

The states that require uninsured motorist coverages

Several states make UM and UIM coverage mandatory on any car insurance policy, while only a few require UMPD. Most states offer these coverages but allow drivers to reject them by signing a coverage selection form. Check the table below to see what coverages are required or available in your state.

State	UM coverage	UIM coverage	UMPD coverage

Alabama	Optional	Optional	Not available
Alaska	Optional	Optional	Optional
Arizona	Optional	Optional	Not available
Arkansas	Optional	Optional	Not available
California	Optional	Optional	Optional
Colorado	Optional	Optional	Not available
Connecticut	Required-At least $25,000 per person/$50,000 per occurrence	Required-At least $25,000 per person/$50,000 per occurrence	Not available
Delaware	Optional	Optional	Optional
District of Columbia	Required-At least $25,000 per person/$50,000 per occurrence	Optional	Required- $5,000 per occurrence/$200 deductible
Florida	Optional	Optional	Not available
Georgia	Optional	Optional	Optional
Hawaii	Optional	Optional	Not available
Idaho	Optional	Optional	Not available
Illinois	Required-At least $25,000 per person/$50,000 per occurrence	Required-At least $25,000 per person/$50,000 per occurrence	Optional
Indiana	Optional	Optional	Optional
Iowa	Optional	Optional	Not available
Kansas	Required-At least $25,000 per person/$50,000 per occurrence	Required-At least $25,000 per person/$50,000 per occurrence	Not available
Kentucky	Optional	Optional	Not available
Louisiana	Optional	Optional	Optional
Maine	Required-At least $50,000 per person/$100,000 per occurrence	Required-At least $50,000 per person/$100,000 per occurrence	Not available
Maryland	Required-At least $30,000 per person/$60,000 per occurrence	Required-At least $30,000 per person/$60,000 per occurrence	Required-$15, 000 per occurrence/$250 deductible
Massachusetts	Required-At least $20,000 per person/$40,000 per occurrence	Optional	Not available
Michigan	Optional	Optional	Not available
Minnesota	Required-At least $25,000 per person/$50,000 per occurrence	Required-At least $25,000 per person/$50,000 per occurrence	Not available
Mississippi	Optional	Optional	Optional
Missouri	Required-At least $25,000 per person/$50,000 per occurrence	Optional	Not available
Montana	Optional	Optional	Not available
Nebraska	Required-At least $25,000 per person/$50,000 per occurrence	Required-At least $25,000 per person/$50,000 per occurrence	Not available
Nevada	Optional	Optional	Not available
New Hampshire	Required (if car insurance is required)-At least $25,000 per person/$50,000 per occurrence	Required (if insurance is required)-At least $25,000 per person/$50,000 per occurrence	Not available
New Jersey	Optional	Optional	Optional
New Mexico	Optional	Optional	Optional
New York	Required-At least $25,000 per person/$50,000 per occurrence	Optional	Not available
North Carolina	Required-At least $30,000 per person/$60,000 per occurrence	Required if policy has higher than state-required bodily injury liability limits	Required-At least $25,000 per occurrence/$250 deductible
North Dakota	Required-At least $25,000 per person/$50,000 per occurrence	Required-At least $25,000 per person/$50,000 per occurrence	Not available
Ohio	Optional	Optional	Optional
Oklahoma	Optional	Optional	Not available
Oregon	Required-At least $25,000 per person/$50,000 per occurrence	Optional	Not available
Pennsylvania	Optional	Optional	Not available
Rhode Island	Required if policy has higher than state-required bodily injury liability limits	Required if policy has higher than state-required bodily injury liability limits	Optional
South Carolina	Required-At least $25,000 per person/$50,000 per occurrence	Optional	Required-At least $25,000 per occurrence/$250 deductible
South Dakota	Required-At least $25,000 per person/$50,000 per occurrence	Required-At least $25,000 per person/$50,000 per occurrence	Not available
Tennessee	Optional	Optional	Optional
Texas	Optional	Optional	Optional
Utah	Optional	Optional	Optional
Vermont	Required-At least $50,000 per person/$100,000 per occurrence	Required-At least $50,000 per person/$100,000 per occurrence	Required-At least $10,000 per occurrence/$150 deductible
Virginia	Required (if car insurance is required)-At least $30,000 per person/$60,000 per occurrence	Required (if car insurance is required)-At least $30,000 per person/$60,000 per occurrence	Required-At least $20,000 per occurrence/$200 deductible
Washington	Optional	Optional	Optional
West Virginia	Required-At least $25,000 per person/$50,000 per occurrence	Optional	Required-At least $25,000 per occurrence/$300 deductible
Wisconsin	Required-At least $25,000 per person/$50,000 per occurrence	Optional	Not available
Wyoming	Optional	Optional	Optional

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Understanding uninsured and underinsured motorist coverage limits

The coverage limits start with the

state-mandated minimum

amounts and climb up from there. It is typical for drivers to have matching bodily injury (BI) and uninsured motorist limits on their policy, that way, they are protecting themselves with the same level of coverage they are protecting others. However, you can choose to have higher BI limits with lower UM/UIM coverage.

Limits for uninsured and underinsured motorist coverage are stated in a format like this: $25,000/$50,000. Here’s how that breaks down:

$25,000 - The coverage limit for a single person’s bodily injury in a UM or UIM claim

$50,000 - The total coverage for all injuries in the accident

If UMPD coverage is chosen, it is written separately and will have the selected deductible listed (if there is one). It would look like this:

$10,000/500

$10,000 - The total coverage for property damage after the $500 deductible is paid

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Do I really need uninsured motorist coverage?

In the states where it is mandated, you must carry UM coverage to drive your car legally. You actually won’t be able to buy car insurance without having UM as part of your policy and, in many cases, UIM as well.

But other types of car insurance may appear to do the same thing as UM and UIM, such as MedPay and PIP and that can make knowing what coverage you need extremely confusing.

For example, MedPay will cover the cost of your injuries with no deductible or copay within the limits of its coverage, but MedPay coverage limits are typically much lower than UM and UIM coverages. While it’s ideal for low-limit claims, it falls short when the loss is more serious. The same goes for PIP coverage, although some states offer PIP with slightly higher limits and a deductible.

And what if you have

health insurance

? Do you still need uninsured motorist coverage? In states with mandatory UM and/or UIM, you’ll still need at least the minimum amount the state prescribes. Otherwise, good health insurance can stand in for UM and you might save money off your car auto insurance by rejecting this coverage. Here are some times when choosing to keep UM/UIM coverage on your auto policy might be worth it:

You have a high-deductible health plan

You have limited health insurance that would leave you with gaps in coverage for things like prescriptions, x-rays, or prosthetics

You don’t have health insurance

You frequently have passengers in your car that do not have their own car insurance or health insurance

Keep in mind, health insurance, MedPay, and PIP do not cover property damage.

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Choosing the right amount of UM coverage

The average medical treatment that requires hospitalization as a result of a car accident is around $60,000. Unless you’re in the very small percentage of people who can afford to cover this cost out of pocket, it’s wise to at least carry this amount for an individual, plus a little extra for more severe injuries. A good rule of thumb is to purchase $100,000/$300,000/$100,000 in coverage or higher.

UMPD coverage, if you have the option, is great for folks who don’t have collision coverage. UMPD is usually much cheaper, and even if your state has low coverage limits—

California

only has a $3,500 coverage limit—it will at least help you with a down payment toward a new car. For drivers that are financially comfortable with buying a new car right away or who have collision coverage, UMPD isn’t necessary.

MORE:

How much coverage do you need when buying a new car?

What does it mean to stack insurance?

Stacking insurance is an interesting way that insurance companies can offer drivers additional UM/UIM coverage based on the number of cars they insure. In most states, your UM/UIM coverage pays out as stated, per car/per occurrence. However, other states allow the UM/UIM coverage to be multiplied by the number of cars on the policy, which is called “stacking”.

There are two ways that stacking insurance can work: Stacking insurance within one policy and stacking it within two policies. Here’s what that means.

Stacking within a single policy: If you have one car insurance policy with two cars on it and each has $50,000 in UM coverage, stacking the insurance would result in a total of $100,000 in coverage.

Stacking insurance limits across two policies: Now imagine you have two unique car insurance policies in your name, each with $50,000 in coverage. In an accident with an uninsured driver, stacking the benefits would allow a ceiling of up to $100,000 in coverage.

If you’re trying to determine if stacking UM/UIM coverage is right for you, there are a couple of things to consider:

It will likely cost extra to purchase UM/UIM coverage that is stackable

You must add stacking to your policy before an accident happens. It can’t be applied retroactively

UM only applies to accidents someone else causes, not an accident you’re at fault for. None of the uninsured motorist coverages apply to at-fault accidents.

How much does uninsured motorist coverage cost?

For uninsured motorist coverage, the pricing varies depending on your driver profile and your vehicle make and model, but also on the rate of uninsured drivers in your state. The higher the rate of uninsured drivers, the more UM and UIM tends to cost. The average cost of uninsured motorist coverage is between $50-$75 per year.

Here is a table showing states with the highest and lowest percentage of uninsured drivers.

State	Percentage of uninsured drivers

Mississippi	29.4%
Florida	20.4%
California	16.6%
Texas	8.3%
New York	4.1%
New Jersy	3.1%

Drivers with higher risk profiles can expect to pay more for the coverage while drivers with clean records and good credit that live in a state with fewer uninsured drivers can expect to pay less.

MORE: High-risk car insurance: Everything you need to know

How do I make an uninsured motorist coverage claim?

If you’re in the unfortunate position of making a claim and you think you might need to use your uninsured or underinsured motorist coverage, don’t worry. You would call your insurance company just like you normally would for any accident and let your claims adjuster handle the details. Unless it was a hit-and-run accident, the odds are you don’t know if the other driver has an active insurance policy or not.

The main thing to keep in mind is to exchange insurance information if possible, contact the police and file an accident report, especially if you are involved in a hit-and-run. Some states require a police report for UM coverage to apply.

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How do uninsured motorist coverage payouts work?

It’s important to have realistic expectations when you’re looking to collect on uninsured motorist coverage benefits. Your insurance provider may be able to make medical payments directly to your health provider under UM coverage.

There can be a delay for UIM since this coverage kicks in after the at-fault driver’s insurance runs out. Also, for UMPD coverage, if your state requires the driver to be identified before the payout, that may take days or weeks. Or the insurance company could deny the coverage if the person isn’t found at all.

If you receive any medical or repair bills in the mail, check with your claims adjuster to see if they will reimburse you any funds or if you should forward the bill to the insurance company for direct payment.

MORE:

How police catch uninsured drivers

How to save money on car insurance

As with all

types of car insurance

, you must add uninsured motorist coverage before you experience the loss. Doing so is as easy as contacting your insurance agent and requesting to add or increase coverage to your current car insurance policy.

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Do I need uninsured motorist coverage if I have full coverage?

If your state requires UM/UIM coverage, you must have it on your policy regardless of your other coverages. While the term “full coverage” refers to a policy that has liability, collision, and comprehensive coverage, to be fully protected, you will want to have UM/UIM to cover your medical expenses if an uninsured driver hits you.

Is uninsured/underinsured motorist coverage worth it?

Uninsured and underinsured motorist coverage is typically inexpensive and doesn’t add too much to what you’re already paying in car insurance. For the peace of mind it offers, uninsured and underinsured coverage can be a worthy investment for the price.

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