Liability insurance works on a simple assumption: the driver who causes a crash has coverage that pays for the harm. When that assumption fails, uninsured and underinsured motorist coverage is what stands in for the missing policy.
The Insurance Research Council estimated that 15.4 percent of motorists, about one in seven, were uninsured in 2023. Rates differ considerably by state. Beyond drivers with no coverage at all, there are drivers carrying only a state minimum that a serious injury claim can exhaust quickly.
The gap it fills
Picture a crash where the other driver is clearly at fault. Your medical bills and lost income would normally be paid by their bodily injury liability coverage. If they have none, or if they have a small limit that runs out well short of your actual costs, the shortfall does not disappear. Without this coverage it lands on you, on your health insurance, or on a lawsuit against someone who may have nothing to collect.
Uninsured and underinsured motorist coverage sits on your own policy and responds in exactly those situations. You are effectively buying a backup for the other driver's liability coverage.
UM and UIM are not the same thing
The two are usually sold together and are often written as UM/UIM, but they respond to different failures.
Uninsured motorist (UM) applies when the at-fault driver has no liability coverage at all. In most states it also covers a hit and run, where the driver cannot be identified. Some states impose conditions on hit-and-run claims, such as requiring physical contact between the vehicles or a police report filed within a set time, so the details matter.
Underinsured motorist (UIM) applies when the at-fault driver has coverage but not enough of it.
How UIM calculates what it pays is where states diverge sharply, and the difference is significant:
- Under an excess or add-on approach, your UIM limit stacks on top of whatever the at-fault driver's insurer pays.
- Under a difference in limits approach, your UIM limit is reduced by what the other driver's insurer paid, and you receive only the difference.
The same policy limit produces very different outcomes under those two rules. Which one applies where you live is a question for your state's Department of Insurance or a licensed agent in your state.
Bodily injury and property damage are separate
Another common gap. Uninsured motorist coverage by itself normally covers bodily injury only, meaning medical treatment, lost wages, and in many states pain and suffering, for you, your household members, and your passengers.
It does not repair your car. That is a separate coverage:
| Coverage | What it responds to |
|---|---|
| UMBI | Injuries to you, household members, and passengers |
| UMPD | Damage to your vehicle and your property |
Uninsured motorist property damage (UMPD) is not available in every state, and where it is available it may carry its own deductible. In states without it, drivers typically rely on their own collision coverage for vehicle damage after a crash with an uninsured driver, paying the collision deductible.
If you carry collision coverage, you already have a route to getting your car repaired in this situation. If you dropped collision, UMPD may be the only thing standing between you and paying for repairs yourself, where your state offers it.
It covers more situations than you might expect
Coverage generally is not limited to you sitting in your own car. Depending on the policy language and your state, UM/UIM commonly extends to:
- You and household family members as passengers in someone else's vehicle
- You or a household member struck as a pedestrian
- You or a household member struck while on a bicycle
- Passengers in your vehicle at the time of the crash
The pedestrian and bicycle scenarios surprise people, because there is no vehicle of yours involved at all. The coverage follows the insured person in those cases rather than the car. Confirm the specifics against your own policy, since the wording varies.
Where it is required
This is the part you should not take from any national article, including this one.
Uninsured or underinsured motorist coverage is mandatory in roughly twenty states plus the District of Columbia. In many of the remaining states, insurers are required to offer it, and you must reject it in writing for the policy to be issued without it. That written rejection requirement is meaningful: if a valid rejection was never obtained, some states treat the coverage as included.
Requirements for underinsured motorist coverage specifically are narrower. Only a handful of states mandate it.
State lists circulate widely online and go stale. Requirements change, and the commonly cited industry list dates from years ago. Verify against your state's Department of Insurance or ask a licensed agent in your state, and check your own declarations page to see what you actually carry today.
Stacking
In some states, if you insure more than one vehicle, you may be able to stack your UM/UIM limits, combining the limit across vehicles for a single claim. Other states prohibit it, and some allow insurers to offer policies that specifically bar it in exchange for a lower rate.
If you have more than one vehicle on a policy and this is relevant to you, ask directly whether stacking is available in your state and whether your current policy permits it.
How it interacts with your other coverage
A few practical points on how the pieces fit together.
Health insurance. Your health plan may pay medical bills first, then assert a lien or subrogation interest against any UM/UIM recovery. The interaction depends on your health plan and your state, and it is worth asking about before you assume a settlement is yours to keep.
Personal injury protection. In no-fault states, PIP typically pays medical expenses first, and UM/UIM addresses what falls outside or beyond it. The sequencing is state-specific.
Your limits. Many insurers cap UM/UIM at or below your own liability limits. If you increase liability, ask whether the UM/UIM limits move with it. They often do not adjust automatically.
What to check on your own policy
Open your declarations page and look for four things: whether UM and UIM appear at all, what limits they carry, whether UMPD is listed separately, and whether any deductible applies.
If UM and UIM are there but at your state's minimum while your liability limits are higher, that is worth a conversation with your agent, because the coverage that protects you is then narrower than the coverage protecting everyone else.
Related reading: car insurance coverage types and how car insurance deductibles work.
Availability, limits, stacking rules and mandatory offer requirements vary by insurer and by state, and your policy documents control in every case. For anything specific to your situation, consult a licensed agent or your state's Department of Insurance. You can also learn more about auto insurance and get connected with licensed providers who cover your area.