Key Takeaways
- Roughly 1 in 8 U.S. drivers is uninsured, according to estimates from the Insurance Research Council.
- UM coverage pays your medical and damage costs when the at-fault driver has no insurance at all.
- UIM coverage activates when the at-fault driver's policy limit is too low to cover your actual losses.
- Most states require UM coverage; UIM requirements vary by state.
- UM/UIM coverage is generally among the more affordable add-ons on an auto policy.
UM/UIM Coverage
Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage are auto insurance protections that pay for your injuries and, in some cases, vehicle damage when the driver who caused an accident either has no insurance at all or doesn't have enough to cover your losses. They step in where the at-fault driver's policy falls short — or doesn't exist. These coverages are designed to protect you from a gap that liability insurance alone cannot fill.
UM and UIM are often sold together but function separately: UM applies when the at-fault driver carries zero liability insurance; UIM applies when their policy limit is lower than your total damages. Some states also recognize 'stacked' UM/UIM coverage, which allows policyholders to combine limits across multiple insured vehicles.
The Problem UM/UIM Coverage Solves
Auto liability insurance is supposed to make accident victims whole. The system works when every driver carries adequate coverage — but a significant share of American drivers don't. Estimates from the Insurance Research Council suggest that roughly one in eight drivers on U.S. roads has no auto insurance at all.
~1 in 8
U.S. drivers estimated to be uninsured
According to the Insurance Research Council, an estimated 12–14% of U.S. motorists carry no auto insurance.
26%
Uninsured driver rate in some high-risk states
In certain states, the uninsured motorist rate has been measured well above the national average, increasing the likelihood of an encounter with an uninsured driver.
Even drivers who are technically insured sometimes carry the state minimum, which may be far too little to cover serious injuries or significant vehicle damage. If one of those drivers causes an accident that injures you, you're left pursuing money from someone who may not have it. That's the exact problem UM and UIM coverage are designed to solve.
For a broader look at how these coverages fit into your overall policy, see Auto Insurance Decoded.
How UM and UIM Work in Practice
Uninsured Motorist (UM) coverage pays when the driver who hit you has zero liability insurance. It typically covers your medical bills, lost wages, and pain and suffering — the same categories you'd normally recover from the at-fault driver's liability policy, except now your own insurer steps in as the payer.
Underinsured Motorist (UIM) coverage activates in a different scenario: the at-fault driver has insurance, but not enough. Their policy pays its limit first; your UIM coverage then covers the gap between that payout and your actual losses, up to your own UIM limit.
Match Your UM/UIM Limits to Your Liability Limits
Many insurance professionals suggest carrying UM/UIM limits that mirror your liability limits. If you carry $100,000/$300,000 in liability coverage, matching that with equal UM/UIM limits ensures you're extended the same protection you give others. Ask your insurer what matching limits would cost — the price difference is often smaller than drivers expect.
Both coverages are typically purchased as a per-person/per-accident limit pair — for example, $50,000 per person and $100,000 per accident. The right limit for you depends on your income, assets, and health insurance situation. A licensed insurance agent can help you evaluate that. This article is for general informational purposes and is not personalized insurance advice.
What UM/UIM Typically Covers — and What It Doesn't
UM and UIM coverage primarily addresses bodily injury: medical expenses, rehabilitation costs, lost wages, and in some states, pain and suffering. Many policies also offer a separate UM Property Damage (UMPD) component to cover repairs to your vehicle when an uninsured driver is at fault.
Hit-and-Run Claims and UM Coverage
Most states allow UM coverage to apply to hit-and-run accidents, treating the unknown driver as an uninsured motorist. However, many states require physical contact between vehicles as proof — a driver who forces you off the road without touching your car may not qualify. Some states accept witness testimony or other evidence in place of contact. Check your policy language and state requirements before assuming a hit-and-run is covered.
There are meaningful exclusions. UM/UIM does not typically pay if you were the at-fault driver. Hit-and-run claims may be covered under UM, but most states require some evidence of physical contact — verify this with your insurer before assuming coverage applies. Additionally, UM/UIM generally won't duplicate payments already made by other coverage types like PIP or MedPay. For a comparison of those medical coverages, see how PIP and MedPay differ.
Policyholders who drive in multiple states — or who want to understand common coverage gaps — should review coverage gaps drivers discover only after an accident for scenarios where standard policies can fall short.
Is UM/UIM Coverage Worth the Cost?
UM/UIM coverage is generally considered one of the more cost-effective protections on an auto policy. Because medical costs after a serious accident can reach into the tens or hundreds of thousands of dollars, the premium added for UM/UIM limits is often modest relative to the risk it covers.
Whether it makes sense for your situation depends on factors like how much health insurance you carry, your state's minimum liability requirements, and how much time you spend driving. Drivers who carry liability-only policies should be especially aware of what they're not protected against — see liability-only vs. full coverage for more context. And if you've encountered common misconceptions about what auto insurance covers, auto insurance myths addresses several that affect coverage decisions.
This article provides general information about auto insurance concepts and is not personalized insurance, legal, or financial advice. Coverage terms, requirements, and availability vary by state and insurer. Consult a licensed insurance professional for guidance specific to your situation.