Car insurance is more than just a legal requirement—it’s a financial safety net. Most states require drivers to carry auto liability insurance, which helps cover damages you cause to others in an accident. For example, if you rear-end another vehicle, your liability coverage can pay for the other driver’s repairs and medical bills, up to your policy limits. Without it, you’d be paying those costs out of pocket.
But here’s the problem: not every driver follows the rules. Some people drive without insurance, and others carry only minimal coverage that won’t fully cover the damage they cause. If one of these drivers hits you, you could be left footing the bill. That’s why uninsured/underinsured motorist (UM/UIM) coverage is so important.
What Is Uninsured/Underinsured Motorist Coverage?
Uninsured/underinsured motorist coverage protects you and your passengers if you’re in an accident caused by someone who:
- Has no insurance (uninsured), or
- Doesn’t have enough coverage to pay for your damages (underinsured).
Depending on your state and insurer, UM and UIM may be bundled together or offered separately. If you’re injured or your car is damaged because of an uninsured or underinsured driver, this coverage can help pay for:
- Medical expenses
- Vehicle repairs
- Other related costs, up to your policy limits
How Does Uninsured/Underinsured Motorist Coverage Work?
Here’s an example: You’re hit by a driver who’s at fault. Your medical bills and property damage total $200,000, but their insurance only covers $100,000. Your underinsured motorist coverage can step in to cover the remaining $100,000—up to your policy limit.
UM coverage can also apply in hit-and-run accidents, although rules vary by state and insurer. Some companies require property damage claims from hit-and-runs to go through your collision coverage instead.
One important note: UM/UIM coverage typically doesn’t pay out until the other driver’s fault is confirmed, which can affect how quickly you receive funds.
How Much Coverage Do You Need?
When choosing UM/UIM coverage, pay attention to your liability limits. Your UM/UIM limit usually matches your auto liability limit—the maximum amount your insurer would pay if you caused an accident. You can’t set UM/UIM limits higher than your liability limits, so if you want more protection, you’ll need to increase both.
For even greater protection, consider excess UM/UIM coverage through a personal umbrella policy. This kicks in after your standard UM/UIM limit is reached and can provide additional peace of mind.
If your insurer offers personal injury protection (PIP) or medical payments (MedPay) coverage, those may also help after an accident, regardless of fault. However, they have their own rules and may not fully cover costs from an uninsured or underinsured driver.
Why It Matters
Accidents happen every day, and with rising costs, more drivers are skimping on insurance. Without UM/UIM coverage, you could end up paying for damages you didn’t cause.
Don’t let someone else’s lack of coverage put your finances at risk. Contact us today to review your options and make sure you have the protection you need.
