Uninsured and Underinsured Motorist Coverage Guide

What is uninsured and underinsured motorist coverage?

Due to the number of uninsured — and underinsured — drivers on the roads, these coverage types offer valuable protection. In this guide, we will review key benefits and components of uninsured and underinsured motorist coverage, including how it works, what it protects and how much it costs.

Uninsured/underinsured motorist coverage — quick facts:

• Kicks in when the at-fault driver doesn't have enough — or any — liability coverage
• Can protect you in the event of a hit-and-run collision
• Costs more in states with higher numbers of uninsured drivers
• Can cover instances in which an at-fault driver's insurer denies a claim or goes out of business

For example, if you are rear-ended, you would ideally file a property damage claim with the at-fault driver's insurance company. Your car would be repaired to its pre-accident condition. If the other driver does not have insurance or their limits are not high enough to cover your damages, uninsured/underinsured motorist coverage would step in to cover the costs.

Legally, a driver who is at fault is required to cover all damages, regardless of whether or not they carry enough insurance — or any at all. However, getting this money can be a hassle and can involve small claims court. At-fault drivers may leave the scene of an accident, leaving you with no insurance company with which to file a claim in the first place. Uninsured motorist coverage allows you to receive the money you need to be made whole while putting the onus on your insurer to recoup money from the at-fault driver. 

How much uninsured motorist insurance coverage costs

The cost of uninsured motorist coverage depends on many factors, including the insured party's driving history, location, and vehicle type.

The Zebra's data offers the following premium estimates based on a 30-year-old male driving a 2016 Honda Civic with no accidents or violations:

Bodily injury vs. property damage

Both uninsured and underinsured motorist coverages are broken into bodily injury and property damage coverage options. Similar to liability coverage, uninsured bodily injury (UMBI) protects you on a per person, per accident basis. Your property damage (UMPD) coverage pays for damage to your vehicle on a per accident basis.

UMPD vs. collision insurance

For example, you are financing a 2020 Toyota 4Runner — MSRP starting at $36,120. On your way home from work, you’re hit by an uninsured driver, totaling your vehicle. Without uninsured property damage coverage, the only way to repay your loan and get a new vehicle would be to file a collision claim.*

Collision claims are seen as at-fault accidents and will impact your premium. On average in 2019, an at-fault accident raised rates $767 per year. Most insurance companies will charge you 3-5 years for violations and accidents. In this example, the uninsured driver’s damages would cost you $2,301-$3,835 plus your deductible.

UMPD claims are generally rated as a not-at-fault accident on your insurance premium — like a comprehensive claim. Our research shows the average UMPD claim raises rates $72 per year in 2019. Your uninsured property damage coverage does feature a deductible. However, depending on the specifics of the accident, your insurance company can reimburse you for the deductible.

*You can also take the at-fault driver to small claims court. However, this doesn’t guarantee an immediate payout.

This is similar to underinsured motorist property damage coverage. If the vehicle is totaled near its asking price and the at-fault driver only carries the state minimum, their liability coverage will run out before you are fully compensated. There are no states in the US in which the minimum property damage liability limit is above $30,000.

In this example, you would be left in a situation where the at-fault driver does not have enough property damage liability coverage to pay for your damages. This is where underinsured property damage liability comes in. Like an uninsured property, this coverage features a deductible. You should be able to negotiate with your insurance company to have the at-fault driver to cover the deductible.

How much uninsured motorist coverage do I need?

If you live in a state that requires uninsured or underinsured coverage, you must at least carry the minimum set by the state. In most cases, you may elect to go beyond that coverage amount in order to fully cover the cost of a new vehicle or to ensure that you won't be stuck with high medical bills. 

Uninsured motorist bodily injury-related coverage will insure you against medical expenses and related costs in the case of injury, while property damage coverage will protect your motor vehicle. Depending on your preference and your state, you can elect to carry one or carry both. In terms of dollar value limitations, it is recommended to have your liability limits and your uninsured motorist limits match. Most experts recommend keeping liability limits on your insurance policy at 100/300 ($100,000 per person/$300,000 per accident). 

Stacked vs. unstacked insurance coverage

Stacked insurance increases your uninsured motorist coverage based on the number of cars you insure. 

Stacked car insurance example: You own three vehicles insured with $10,000 worth of uninsured bodily injury coverage (UMBI). If you're struck by an uninsured driver with stacked coverage, you could apply all three vehicles' worth of $10,000 in UMBI coverage to give you $30,000 of total coverage.

Stacked coverage usually costs more than conventional coverage. Stacked coverage may not be available in every U.S. state.

Learn more about stacked car insurance.

States where uninsured motorist coverage is required

The following states require drivers to carry uninsured or underinsured motorist coverage. 

*Car insurance is not required by law in New Hampshire, but drivers who purchase insurance are required to carry UM/UIM coverage.

**UM/UIM is mandatory in Rhode Island if drivers carry more than the minimum liability limits.

Uninsured and underinsured coverage FAQs

Uninsured drivers in U.S. states

Below are the states with the highest percentages of uninsured drivers. Uninsured and underinsured insurance coverage is potentially a good value if you live in a state ranked high on this list.