Uninsured and Underinsured Motorist Coverage Car Insurance

Uninsured and Underinsured Motorist Coverage Car Insurance

Find Cheap Auto Insurance Quotes in Your Area

Currently insured?
{"buttonText":"Find Insurers","customEventLabel":"","defaultProduct":"auto","defaultZip":"","hideTitle":false,"id":"QuoteWizardQuoteForm--34","isAgeFieldVisible":true,"isDeltyForm":false,"isInsuranceTypeFieldVisible":true,"isInsuredStatusFieldVisible":true,"quoteWizardEndpoint":"https:\/\/quotes.valuepenguin.com","showTrustMessage":false,"style":"dropshadow","tier":"default","title":"Find Cheap Auto Insurance Quotes in Your Area","trackingKey":"_uninsured-underinsured-motorist-cov","trustMessage":"It's free, simple and secure.","vendor":"vp"}

Driving can be risky — especially because 1 in 8 drivers is uninsured. If you get into an accident with an uninsured driver, you might wonder who foots the medical bills and car repair costs. Luckily, uninsured/underinsured motorist insurance can help.

What is uninsured motorist coverage?

When you're in an accident caused by someone who doesn't have insurance, uninsured motorist coverage pays for your financial losses. There are two types of UIM:

  • Uninsured motorist coverage for bodily injury covers your own medical bills following a car accident with an uninsured driver. It's similar to liability bodily injury coverage, which covers medical expenses for the other driver involved in the car accident.
  • Uninsured motorist coverage for property damage pays to repair your own car if you're in an accident with someone who's not insured. It's similar to liability property damage insurance, which covers damage to the other driver's car.

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 house cleaning and babysitting, that you're unable to perform because of injuries from the accident
  • Uninsured/underinsured motorist property damage (UIM PD)
  • Damage to your vehicle
  • Damage to your home

UIM limits are usually written in three parts; for example: $25,000/$50,000/$25,000. The first number represents the amount an insurer will pay for each person if an uninsured driver hits your car. The insurer pays up to $50,000 for all injuries associated with the accident (the second number) and up to $25,000 for any property damage (the third number).

Let's say your medical bills total $20,000 following a car accident. Usually, you would file a claim against the at-fault driver's bodily injury liability coverage. But because the other driver is uninsured, you would tap into your uninsured motorist insurance. So long as your limits are at least $20,000, you should be able to recoup all losses.

Where is uninsured/underinsured motorist coverage required?

There are 20 states that require UIM. The bodily injury version of the coverage is typically mandatory. In a few states, you are required to carry UIM property damage, while in some states the coverage is not even offered. The table below lists states that make UIM mandatory:

State

UMBI requirements
Connecticut25,000/50,000
D.C.25,000/50,000

Illinois*

25,000/50,000

Kansas

25,000/50,000
Kentucky10,000

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

Mandatory, but no minimum

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 state's minimum limits for bodily injury and property damage liability coverage. We 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 sample quotes for a 34-year-old married man, premiums for a $25,000/$50,000 policy range from $33–$76 per year. For a policy with four times the coverage — limits of $100,000/$300,000 — the premium only cost between $86–$134 per year.

UIM is significantly cheaper than the price of liability coverage, but prices fluctuate between states. That's because some states have a higher percentage of uninsured drivers, which means there's a greater chance you'll use UIM coverage.

The price of a policy depends largely on the number of uninsured drivers in your state. For example, rates in Massachusetts are usually cheap because Massachusetts has the lowest percentage 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.

State

LimitUMBI 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 and underinsured motorist insurance as one premium, so divided in two to show price for each

Is uninsured motorist insurance worth it?

The average hospital bill following a car accident is around $60,000. In most cases, UIM coverage is worth carrying — it won't cost much to get a policy that covers this type of bill.

If your limit is $25,000, then a car accident with an uninsured driver pays for less than half of the costs, leaving you on the hook for the rest. When setting your insurance limits, you should consider your net worth. That's the value of all of your assets, such as home equity, after subtracting your liabilities, such as student loan debt. So if your net worth is $50,000, then your UIM limits should be at least $50,000. Luckily, there's not much of a price difference between low and high coverage limits.

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.

Additionally, if you have comprehensive and collision insurance, any car damage will be covered, regardless if the other driver is insured. Both coverages, however, will make your policy more expensive.

When should you 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.

What is stacking?

Stacking allows you to combine uninsured/underinsured coverage limits, which increases your protection. Depending on state law, you may be able to stack coverage on multiple vehicles within the same policy, or stack coverage across multiple policies.

Here's how stacking on the same policy works.

Let's say your car insurance policy covers two cars. You have uninsured motorist bodily injury coverage limits of $20,000 on each car. Stacking your coverage within that policy increases your limits to $40,000 per accident. So if you're injured in a car accident with someone who's not insured, your insurance will help pay medical expenses up to $40,000.

In some states, you can stack UM/UIM coverage limits across multiple car insurance policies.

Let's say you have a car insurance policy for your own car, with a UMBI limit of $25,000. Your aunt lives with you and lists your name on her auto insurance policy. Her coverage limit is $35,000. Stacking coverage across both policies would increase your UMBI coverage limit to $60,000. If you're hit by an uninsured driver, your insurer would help cover medical bills up to $60,000.

And in some states, you may file a claim against multiple policies if you're injured as a passenger or pedestrian. So if you're a passenger in a car that's hit by an uninsured driver, for example, you're covered under two policies: your car insurance policy and your driver's policy.

How do I file an uninsured/underinsured motorist claim

Filing a claim 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 have to prove your case. Your insurer may also only pay when the other driver is largely responsible for your injuries — which may require a court judgment to determine the extent of fault. Your claim payout may also be governed by your state's negligence law.

You can help your case by preparing this information:

  • A full written description 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 your injuries cause you to miss work and potential income

After making a claim, remember that:

  • You should hear back within a time frame set by your state and insurer. Expect updates on any delays.
  • Be prepared to discuss the incident. A liability claims adjuster may have questions about your injuries and the cost of the claim.
  • You might have to move through the claims process and reach a payout agreement within a set time frame. You can either accept the offer or file a lawsuit if you disagree.
  • Your insurer will ask you to waive all future rights to pursue the person and company for further payments after settlement. You should ask an attorney to review the settlement and release, only signing it if you're ready.
  • Know your rights. If your state allows stacking, then you may ask for a higher payout in some cases.

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.