Uninsured and Underinsured Motorist Coverage: What is It and Why Do You Need It? 

Most people know how important it is to carry personal auto insurance. If you are in an accident, the insurance you hold can help you pay for much of the expenses associated with that accident.

However, what you may not know is your comprehensive insurance is not meant to cover you in the event of an accident. 

Instead, it is used to cover the other vehicle and its passengers if you are the one at fault in an accident. 

Similarly, if you are in an accident where the other party is at fault, you will need to go after damages from that party’s insurance.

But what happens if the other party does not have insurance or they do not have enough? 

Although most states have laws mandating all drivers to hold insurance, approximately one out of every eight drivers does not carry insurance. 

In some states, that rate is as high as one out of every five. If you are unfortunate enough to be involved in an accident with one of these drivers, you could be left covering your costs out of pocket. That is unless you have uninsured and underinsured motorist coverage on your policy.

 

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Uninsured Motorist Coverage

Uninsured motorist coverage (UM) covers the costs of your medical bills and lost wages if you are in an accident in which you are not the at-fault driver and the other driver either a) has no insurance or b) does not carry the state minimum insurance.

Uninsured motorist coverage will step in and fulfill the role the other party’s liability insurance would have. In addition to uninsured motorists, UM insurance will apply if you are the victim of a hit and run accident.

UM coverage will cover the following for you and all passengers in your vehicle:

• Medical Costs
• Lost Wages
• Pain and Suffering

Uninsured motorist coverage (UM) typically does not apply to property damage. However, many policies will allow you to buy additional coverage for property damage. This coverage is typically referred to as UMPD.  

 

VIDEO: What Is Uninsured Motorist Coverage?

 

 

State Laws for Uninsured Motorist Coverage

State	Requirements for buying UM or being offered UM	Can you reject UM in writing?	Minimum UM coverage amount	Is UMPD required? If so, minimum coverage amount	UMPD deductible
Alabama	Must be offered	Yes	25/50	No	N/A
Alaska	Must be offered	Yes	50/100	You can reject UMPD in writing; $25,000 minimum if you buy it	$250
Arizona	Must be offered	Yes, on a state-approved form	UM 15/30	No	n/a
Arkansas	UM must be offered. UIM must be offered if you buy UM.	Yes	UM – 25/50	You can reject UMPD in writing; $25,000 minimum if you buy it	$200
California	Must be offered	Yes	15/30	You can reject UMPD coverage	If you have collision coverage, UMPD only pays the deductible not covered by collision insurance, up to $3,500.
Colorado	Must be offered	Yes	25/50	May be offered at your request	N/A
Connecticut	Must be offered	Yes	20/40	No	N/A
Delaware	Must be offered	Yes	15/30	Acceptance of UM includes UMPD; $5,000	$250 (unless otherwise agreed in writing)
District of Columbia	UM is required	You can reject only UIM	UM – 25/50	Yes; $5,000	$200
Florida	Must be offered	Yes	10/20	N/A	N/A
Georgia	Must be offered	Yes	25/50	Yes; $25,000	$250
Hawaii	Must be offered	Yes	UM – 20/40	Yes; $10,000	N/A
Idaho	Must be offered	Yes	UM – 25/50	N/A	N/A
Illinois	Required	No	UM – 25/50	UMPD must be offered if you do not have collision insurance (you can reject in writing); $15,000	$250
Indiana	Must be offered	Yes	UM – 25/50 UIM – $50,000	You can reject UMPD; $10,000	Choose no deductible or a max of $300; deductible waived if your car was hit while legally parked and unoccupied
Iowa	Must be offered	Yes	UM – 20/40	N/A	N/A
Kansas	Required	You can only reject coverage that exceeds 25/50	25/50	N/A	N/A
Kentucky	UM must be offered; UIM is available upon request	Yes	25/50 or a $60,000 single limit for both UM and UMPD	N/A	N/A
Louisiana	Must be offered	Yes	15/30	UMPD available but not required	$250
Maine	Required	N/A	50/100	N/A	N/A
Maryland	Required	N/A	30/60	UMPD is required; $15,000	$50 – $250 (options in $50 increments)
Massachusetts	Required	N/A	20/40	N/A	N/A
Michigan	No requirement	N/A	N/A	N/A	N/A
Minnesota	Required	N/A	UM – 25/50	N/A	N/A
Mississippi	Must be offered	Yes	25/50	UMPD can be rejected; $25,000 minimum if you buy it	$200
Missouri	UM required	N/A	25/50	N/A	N/A
Montana	Must be offered	Yes	25/50	N/A	N/A
Nebraska	Required	N/A	UM – 25/50	N/A	N/A
Nevada	Must be offered	Yes	25/30	N/A	N/A
New Hampshire	Must be offered	You can reject UM in excess/umbrella policies only	25/50	Yes; $25,000	N/A
New Jersey	Required on standard policies	N/A	UM – 15/30	Yes; $5,000	N/A
New Mexico	Must be offered	Yes	25/50	Yes; $10,000	$250 maximum
New York	UM required, UIM is optional	N/A	25/50 for injury, 50/100 for death	N/A	N/A
North Carolina	UM required. UIM required if UM coverage exceeds 30/60	N/A	UM – 30/60	Yes; $25,000	$100
North Dakota	Required	N/A	25/50	N/A	N/A
Ohio	An insurer decides whether to offer it	N/A	25/50	Available upon your request, not to exceed $7,500	$250
Oklahoma	Must be offered	Yes	25/50	N/A	N/A
Oregon	UM is required. UIM is required if UM coverage is more than 25/50	N/A	25/50	Yes; $20,000	$200; $300 in hit-and-run claims
Pennsylvania	Must be offered	Yes	15/30	N/A	N/A
Rhode Island	Must be offered	Yes	25/50	Not required but $25,000 minimum coverage if you buy it	$200
South Carolina	UM is required	You can reject UIM	25/50	Yes; $25,000	$200
South Dakota	Required	N/A	25/50	N/A	N/A
Tennessee	Must be offered	Yes	25/50 or a $60,000 single limit	Yes; 15	$200
Texas	Must be offered	Yes	30/60	Yes; $25,000	$250
Utah	Must be offered	Yes	25/65 for UM; 10/20 for UIM	Required if you do not have collision coverage	$250
Vermont	Required	N/A	50/100	Yes; $10,000	$150
Virginia	Required	N/A	25/50	Yes; $20,000	$200
Washington	Must be offered	Yes	25/50	Required if you don’t have collision coverage, minimum of $10,000 in coverage	$100; $300 for hit-and-run claims
West Virginia	UM is required; UIM is optional	N/A	20/40	Yes; $10,000	$300
Wisconsin	UM is mandatory	UIM can be rejected	25/50 for UM; 50/100 for UIM	N/A	N/A
Wyoming	Must be offered	Yes	25/50	N/A	N/A

Source: American Property Casualty Insurance Association

Underinsured Motorist Coverage

Underinsured motorist coverage is similar to uninsured motorist coverage in that it covers your costs if you are not at fault. 

In this case, the other driver does have insurance, however, it is not enough to cover your damages. 

For example, if the other party has $25,000 in liability insurance, their carrier will only pay out $25,000, regardless of the extent or costs of your injuries. 

If you have $75,000 worth of medical bills and lost wages, you are left paying for the rest yourself. 

But, if you have underinsured motorist coverage, your policy will step in to help you cover what the other policy did not. 

If you, for example, have a $100,000 underinsured motorist policy, the at-fault party will cover their policy limits of $25,000. 

Your policy will then come in and pay the remaining $25,000. It is important to understand that your UIM insurance is meant to supplement the other driver’s insurance, not add on to it. 

The maximum payout you can receive is your UIM policy limit, not your UIM plus the other party’s insurance.

Who Should Carry Uninsured and Underinsured Motorist Coverage?

Almost half of the states in the US require drivers to carry some level of UM/UIM insurance. 

Regardless of whether your state requires you to maintain UM/UIM insurance, it is best to elect to do so. 

You don’t want to end up having a huge medical bill that you cannot afford when someone else was responsible for the accident. And in case you are worried about how much the cost of your premium will go up, don’t be. Adding UM/UIM coverage to your policy can cost you as little as $3-$9 per month. 

Finally, while you may think that your health insurance and personal injury protection coverage will be enough to cover your expenses, you must realize that they only cover your current injuries and expenses. They do not account for pain and suffering, future medical bills, or loss of future earnings.  

Don’t get stuck without the insurance coverage you need. Adding UM/UIM is affordable, easy to do, and a smart choice to protect yourself.