Uninsured Motorist Coverage: What Is it? Do I Need it?
Feb 17, 2022 · 13 min read
- Uninsured motorist
- What's covered?
- Underinsured motorist
- Where it's required
- Do I need it?
- Right amount
- Stacking insurance
- Filing a claim
- How to add it
Load full table of contents
You’ve just been in a car accident, and the other driver doesn’t have insurance. They may be sorry about all the damage, but their apologies aren’t going to pay to fix the damage to your car. That’s where the uninsured motorist coverage portion of your car insurance comes in.
Although car insurance is legally required to drive in most states, as much 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 you search for car insurance quotes online.
And to make sure you're clear on all the details, car insurance comparison and broker app Jerry has put together everything you need to know about uninsured motorist coverage.
What is uninsured motorist coverage?
In most states, driving without car insurance carries stiff legal penalties, including fines, license suspensions, and even jail time. But if you’re the victim of a car accident caused by an uninsured driver, none of those consequences help with your situation. There’s no one to cover your vehicle repairs, unless you have uninsured motorist coverage.
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.
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 costs associated with everything from a few stitches to life-saving surgery are eligible for reimbursement with uninsured motorist coverage.
Your lost wages resulting from a car accident can sometimes be paid out through an uninsured motorist coverage claim. If you can’t work due to your injury, you may be eligible to collect through UM.
If the worst-case scenario happens due to a crash with an uninsured driver who’s at fault, even funeral expenses are eligible to be paid through your claim.
Vehicle repairs or replacement
Often, vehicle replacement or repairs are able to be submitted as expenses for a UM claim, either restoring your car to its pre-accident condition or replacing a total loss.
Damage to your property
If an uninsured driver causes damage to your vehicle, yard, fence, or home, uninsured motorist coverage might pay for the repair or replacement cost.
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.
The application of uninsured motorist insurance varies from state to state, though. For example, in California and Illinois you can’t claim vehicle repairs or replacement if the uninsured hit-and-run driver is identified in the end. It’s even tougher to claim property damage caused by a hit-and-run since it’s so easily abused for a fraudulent claim. And in states such as Oregon and Washington, higher deductibles apply for property damage if the offending driver isn’t found.
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.
Without it, you could be left footing the remainder of the bill on your own or attempting to sue the other driver to recoup costs. But if you have underinsured motorist coverage, or UIM, those costs are picked up by your insurance where the at-fault driver’s liability car insurance leaves off.
At its core, underinsured motorist coverage 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 minimum liability insurance, say $10,000 for property damage, but your repairs cost $15,000, what happens is that your underinsured motorist coverage would pick up the remaining $5,000 difference between your expenses and the other driver’s coverage limit.
The differences between uninsured and underinsured motorist coverage
Although they are similar, uninsured motorist insurance and underinsured motorist insurance are two separate insurance components. Your car insurance provider might sell them as a package deal, but they are individual products. Here are the key differences:
Uninsured motorist coverage chips in when an at-fault driver doesn’t have any liability insurance coverage at all. Underinsured motorist coverage tops up your claim after using up all the at-fault driver’s liability coverage limits.
- Uninsured motorist insurance can cover damage from a hit-and-run in most states, whereas underinsured motorist insurance won’t.
- With uninsured motorist coverage, you make just one claim to your own insurance provider for all the damages up to your policy limits. With underinsured motorist coverage, you have two claims to process: one with the other driver’s insurance and one with your own to top up the claim.
The states that require uninsured and/ or underinsured motorist coverage
Some states make uninsured and underinsured motorist coverage mandatory on any car insurance policy. According to the Insurance Information Institute, the following states require that you carry uninsured motorist insurance and/or underinsured motorist insurance.
|Connecticut||UM and UIM|
|Illinois||UM and UIM|
|Kentucky||UM and UIM|
|Maine||UM and UIM|
|Maryland||UM and UIM|
|Minnesota||UM and UIM|
|Nebraska||UM and UIM|
|New Hampshire||UM and UIM (if you opt for insurance)|
|New Jersey||UM and UIM|
|New York||UM and UIM|
|North Carolina||UM and UIM|
|North Dakota||UM and UIM|
|Oregon||UM and UIM|
|South Carolina||UM and UIM|
|South Dakota||UM and UIM|
|Vermont||UM and UIM|
|Virginia||UM and UIM|
|West Virginia||UM and UIM|
What are the two types of uninsured and underinsured motorist coverage?
If you’re at fault in an accident, the insurance claim is divided between two different types of coverage: bodily injury liability and property damage liability. Uninsured and underinsured motorist coverage breaks down into those same two categories. But rather than covering you against being sued for damages you cause, these coverages protect you.
Uninsured or underinsured motorist bodily injury (UMBI/UIMBI) is intended to cover medical costs related to an accident with an at-fault driver who doesn’t have enough car insurance, takes off from the accident scene, or has no insurance at all. It’s the portion of UM or UIM that handles reimbursement for hospital stays and doctor’s visits, medical device requirements or prosthetics, lost wages, and (in some cases) pain and suffering.
Uninsured motorist property damage (UMPD) and underinsured motorist property damage (UIMPD) cover the material losses from a collision with a driver who isn’t adequately insured or doesn’t have any coverage for property damage. It’s the physical damage to your car, your lawn, your fence, and any other related property damage.
Uninsured motorist coverage limits
There are limits to when uninsured motorist coverage can be used. Obviously, you can’t tap into these limits if you’re the person at fault in the accident. If you’re the driver responsible for the collision, your liability insurance coverages—Bodily Injury Liability (BIL) and Property Damage Liability (PDL)—pay for the losses others experience. For your own losses, it’s claimed against your own collision insurance or comprehensive car insurance.
Of course, financial limits can range dramatically, starting with your state-mandated minimum amounts and climbing up from there. The top coverage limit is unlimited UM and UIM, which means you’d never have to worry about being saddled with high medical costs if you’re injured due to an uninsured or underinsured driver.
Limits for uninsured and underinsured motorist coverage are stated in a format like this: $25,000/$50,000/$25,000. Here’s how that breaks down:
- The first number ($25,000) is the coverage limit for a single person’s bodily injury in a UM or UIM claim.
- The second number ($50,000) is the total coverage for all injuries in the accident.
- The third figure ($25,000) is the amount of property damage coverage in the UM or UIM claim.
Do I really need uninsured motorist coverage?
In the 20 states previously detailed where it is mandated, you need uninsured motorist coverage to legally drive your car. You won’t be able to buy car insurance without having UM as part of your policy and, in many cases, UIM as well.
But there are other types of car insurance that may appear to do the same thing as UM and UIM, such as MedPay and personal health insurance. That can muddy the waters. For example, MedPay will cover the cost of your injuries with no deductible or co-pay 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.
And what if you have health insurance? Do you still need uninsured motorist coverage? In states that have mandatory UM and/or UIM, you’ll still need at least the minimum amount the state prescribes. Good health insurance might stand in for UM, but if your health plan has a high deductible or gaps in medical coverage, you could still be left footing a big healthcare bill.
Neither health insurance or MedPay cover property damage, either.
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.
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.
For a healthy 34-year-old married man, we can compare pricing from a popular insurer between Massachusetts and Oklahoma.
In Massachusetts, where the rate of uninsured drivers is low, basic UM and UIM bodily injury coverage is around $13 per month. For intermediate coverage limits, it increases to $26 monthly. At the higher end, coverage costs a little to $30 per month.
In Oklahoma, where more drivers choose to illegally drive without insurance, rates are higher. Minimum coverage is around $82 per month for the same driver. Intermediate coverage increases to $114 per month, while higher end coverage is $162 per month.
Drivers with higher risk profiles can expect to pay more for the coverage while drivers with clean records and good credit who live in a state with fewer uninsured drivers may even pay less than Massachusetts’ rates.
What does it mean to stack insurance?
What happens if you have more than one policy that includes uninsured motorist coverage? In some states, you’re only allowed to claim up to the limit on one of the policies, but in certain states you’re able to "stack" your coverage limits. It’s an approved way of increasing your claims limit without increasing your maximum coverage on a single policy.
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 with 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 the best way to stack a claim, there are a couple of things to consider:
- It will likely cost extra to purchase UM/UIM coverage that is stackable.
- You need to choose or add stacking to your policy before an accident happens. It can’t be applied retroactively.
- UM only applies for accidents someone else causes, not an accident you’re at fault for. None of the uninsured motorist coverages apply to at-fault accidents.
How do I make a UM claim?
If you’re in the unfortunate position of making a claim for uninsured or underinsured motorist coverage, making a claim can be a little more complex than a typical insurance claim. Here are a couple scenarios to illustrate how it might work.
An uninsured driver: You’re T-boned in an intersection by a driver who forgot to renew his car insurance. Rather than filing a claim against the driver’s insurance policy, you’d make a claim for your injuries with your own insurer and, if you have uninsured motorist coverage for property damage, for your car’s repairs or replacement as well. There’s likely a standard deductible to pay on your UM insurance.
A hit-and-run: The same uninsured driver hits your car and leaves the scene, never to be found out. You’d file a claim in the same way with your own insurer. However, your property damage coverage might be subject to a higher deductible amount.
An underinsured driver: The driver who T-bones you has minimum insurance coverage but it isn’t enough to pay for all your medical treatment and your property damage. First, you’ll max out the coverage with their liability insurance, then you’ll file a second claim with your own policy’s UIM coverage for the balance.
How do UM payouts work?
It’s important to have realistic expectations when you’re looking to collect on uninsured motorist coverage benefits. The purpose of uninsured and underinsured motorist coverage is to reimburse you for the cost of your recovery, whatever that entails medically. And when UM property damage coverage applies, it makes you whole for any losses you experience to your belongings, vehicle, or property.
Payouts normally start with any insurance the at-fault party has until it’s fully tapped out. Then you’ll collect from your UM/UIM coverage within its limitations, and if that’s not enough, any stackable policies are then considered. Although it’s far from common, some states’ insurance plans might allow you to double-dip on benefits.
How to add uninsured motorist coverage to your car insurance policy
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 uninsured motorist coverage and underinsured motorist coverage to your current car insurance policy.
If you’re looking to save money on car insurance like uninsured and underinsured motorist coverage, try Jerry. For fast, easy quotes on auto insurance that include UM and UIM protection, Jerry will show you options from highly competitive insurers in our network of more than 50 providers.
After providing you with a comprehensive cross-analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to. They even help cancel your old policy! So why do all that extra work when Jerry can do it better?
"Jerry is the benchmark in app usefulness! I gave very little information and Jerry pulled up all my existing insurance information and showed me how to get the same coverage for less. I'm now saving around $1400 annually and the entire process took me less than an hour. Highly recommend you download the app!" -Satisfied Jerry User.
Haven’t shopped for insurance in the last six months? There might be hundreds $$$ in savings waiting for you.
Judith switched to Progressive
Saved $725 annually
Alexander switched to Travelers
Saved $834 annually
Annie switched to Nationwide
Saved $668 annually