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Uninsured & Underinsured Motorist Coverage Car Insurance

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One in every eight drivers is uninsured. Getting into an accident with one of those drivers can be a costly affair, especially if you are reliant on their insurance to cover your costs. Luckily there is uninsured/underinsured motorist insurance.

Table of Contents 

What is Uninsured Motorist Coverage?

Uninsured motorist coverage pays for your economic losses when you're injured in an accident caused by someone who doesn't have insurance. There are two kinds of UIM: bodily injury and property damage. The former is akin to bodily injury coverage which covers injuries and their associated costs, while the latter is akin to property damage liability, which covers damage your car or home. The main difference being the Uninsured Motorist versions are meant to cover your expenses, while regular bodily injury and property damage are meant to cover another driver's expenses. The following is covered by Uninsured/Underinsured Motorist insurance: 

  • Uninsured/Underinsured Motorist Bodily Injury (UIM BI)
    • Hospital bills or medical care expenses
    • Lost wages because you've been unable to work due to your injury
    • Replacement services, such as hiring cleaners or babysitters because your injury incapacitates you in normal household chores
  • Uninsured/Underinsured Motorist Property Damage (UIM PD) 
    • Damage to your vehicle
    • Damage to your home 

UIM limits are usually written in three numbers like $25,000/ $50,000/$25,000, similarly to your bodily injury and property damage car insurance. The first represents the maximum for a single person while the second is the maximum for the entire accident under your UIM BI. The third number is your UIM PD.

Uninsured Motorist Example: You get into a crash resulting in medical bills totaling $20,000. Ordinarily you could file a claim for $20,000 from the at-fault motorist's bodily injury liability coverage, but since the other driver is uninsured, you need to tap into your Uninsured Motorist Insurance. So long as your limits are above $20,000, you should be able to recoup all losses. 

Where is Uninsured and/or Underinsured Motorist Required?

There are twenty states that require UIM. Usually the bodily injury version of the coverage is mandatory. In a few states you are required to have the property damage kind, while in some states the coverage is not even offered. The table below lists all of those states that make UIM mandatory: 

StateUMBI Requirements
D.C. 25,000/50,000
Illinois* 25,000/50,000
Kansas 25,000/50,000
Maine 50,000/100,000
Maryland 30,000/60,000
Massachusetts 20,000/40,000
Minnesota 25,000/50,000
Missouri 25,000/50,000
Nebraska 25,000/50,000
New Hampshire 25,000/50,000
New Jersey 15,000/30,000
New York 25,000/50,000
North Carolina 30,000/60,000
North Dakota 25,000/50,000
Oregon 25,000/50,000
South Carolina 25,000/50,000
South Dakota 25,000/50,000
Vermont 25,000/50,000
Virginia 25,000/50,000
West Virginia 25,000/50,000
Wisconsin 25,000/50,000

Limits for UIM generally follow the minimum limits for BI and PD in a state. As we will discuss more below, we would recommend drivers get more than the state minimum in many cases.

How Much Does Uninsured/Underinsured Motorist Insurance Cost?

UIM is much cheaper than standard bodily injury and property damage insurance. Based on premiums we have collected for a 34 year old married male sample driver, the premiums for a $25,000/$50,000 limit range only cost between $33 and $76 a year. For higher limits, $100,000/$300,000, premiums only doubled to $86 and $134 a year for 4x the coverage. UIM prices will fluctuate between states however, since some have a higher percentage of uninsured drivers. Rates in Massachusetts are less costly because Massachusetts has the lowest incidence of uninsured drivers. A state like Oklahoma on the other hand is more costly because it has the highest percentage of uninsured drivers. The prices below reflect quotes from GEICO. 

StateLimitUMBI PremiumUIMBI Premium
Massachusetts 25,000/50,000 $11 $2
50,000/100,000 $14 $12
100,000/30,0000 $15 $25
Oklahoma* 25,000/50,000 $41 $41
50,000/100,000 $57 $57
100,000/30,0000 $81 $81

*Presented Uninsured & Underinsured Motorist insurance as one premium, so divided in two to show price for each 

The cost for UIM in Oklahoma is about 4x to 5x more expensive than in Massachusetts. Overall, the price in your state will depend on the amount of uninsured drivers. In all states however, UIM will still be significantly cheaper than the price of BI and PD. 

Is Uninsured Motorist Insurance Worth It? 

In most cases UIM is worth it. For one, the average hospital bill for a car accident is around $60,000. At $25,000 limits, a car accident with a uninsured driver pays for less than half of the costs, leaving you on the hook for the rest. Second, a rule in insurance is that you should have enough to cover your net worth, or your value after you subtract your liabilities from your assets. Thus if you are worth $50,000, you should have UIM limits that reach $50,000. Luckily, the price difference between the higher limits of coverage is not large. We discuss price more below. 

You should only consider not carrying UIM insurance if you live in a no-fault state like Florida or Michigan where personal injury protection (PIP) is mandatory. PIP pays for your injuries, regardless if the other driver is insured, so you do not have to worry about them paying for your losses. Additionally, if you have comprehensive and collision insurance, any car damage will be covered, regardless if the other driver is insured or not. Both coverages however will make your policy more expensive. 

When Should Have Uninsured Motorist Insurance?When Do You Not Need Uninsured Motorist Insurance
 When required by your state When not required by your state and...
When you do not have PIP You Have PIP or MedPay on Policy and...
When you do not have collision or comprehensive coverage You Have Comprehensive and Collision Insurance

If the right side of the table does not match your current auto policy, you should strongly consider getting UIM. For many people however, getting PIP and collision and comprehensive insurance on the same policy may be too expensive. As we discuss in the next section, UIM may be the more viable and affordable option. 

How Do I File an Uninsured /Underinsured Motorist Claim

Filing for UM and UIM can sometimes be tricky. Since your insurer is basically taking the place of the other driver’s insurance company, you may be placed in a position of having to prove your case. Your insurer may also only pay when that uninsured/underinsured driver is largely responsible for your injuries, which may require a court judgment to determine the extent the other driver was at-fault. Also, the amount you are offered may be governed by your state’s negligence law (where states look into comparative negligence). While you should prepare to collect the evidence and documents listed below:

Before making a claim, you should be prepared to provide:

  • Records of what happened
  • Photos of the scene and any injuries you sustain
  • Records of medical examinations and any bills from doctors and health care providers
  • Receipts of all related expenses
  • Proof of lost wages: If the injuries you sustain cause you to miss work and potential income, documentation of this from your employer is necessary

After making a claim, remember that:

  • You should hear back within a set time frame, as determined by your state and policy, or get an explanation for any delay
  • Be prepared to discuss the incident. There may be conversations with a liability claim examiner or adjuster who may want clarification in order to assess the sustained injuries as well as the cost of the claim
  • Your right to collect compensation for your claim may have a time limit as well: you may be required to accept a settlement within the required time frame as regulated by state law. You can either accept the offer or file a lawsuit if you disagree
  • Sign the release form only if you are ready: As part of the process the insurance company will ask you to waive all future rights to pursue the person and company for further payments after settlement. You should take into account future medical bills and any expenses that might arise. Ask an attorney to review the settlement and release
  • Know your rights: if your state allows stacking, and if what you received from the insurance company is not enough to cover the costs of your injuries, you may be able to make claims of higher amount or under different policy which you are qualified for. When it is legally allowed, review your policy to make sure that stacking is not prohibited in your case

What is Stacking UM/UIM Limits & Supplementary UM/UIM

Some states allow what is called "stacking" to get even more out of your UM/UIM coverage. A stacked coverage means you may collect from more than one policy involved in the accident caused by an uninsured motorist. There are two ways stacking may work. If you were injured while driving your car and you happen to have more than one vehicle insured under the same policy, you may be able to collect up to the insured limit multiplied by the number of cars under the same policy. Or, if you have multiple policies, all of which list you as the primary driver, you may be able to collect from them all until your full costs of injuries are covered. 

You can also collect from multiple policies when you are injured as a passenger or pedestrian. For example, Maine allows insured drivers injured as a passenger in a vehicle he doesn't own to be covered by both the UM coverage of the vehicle he was riding in as well as the UM coverage of his own insurance policy. Car insurance companies in some states also offer what's called "Supplementary Uninsured/Underinsured Motorist" coverage. It is still the same UM/UIM coverage that we've discussed above, but it will also cover you if you ever get into an accident with an uninsured motorist in another state. The stacked option generally costs more than the unstacked option.

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