Last Updated on September 25, 2026
Written by licensed insurance agent Andy walker
Reviewed by the Alias Insurance editorial team.
Uninsured motorist coverage may help when a driver who has no liability insurance causes your injuries. Underinsured motorist coverage may help when the driver has liability insurance, but the policy limits are too low to cover your eligible losses. Both are parts of your own auto policy, and both depend on fault, state law, policy limits, exclusions, and claim proof.
The key difference is simple:
- Uninsured motorist coverage applies when no usable liability coverage exists. It may also apply to a covered hit and run.
- Underinsured motorist coverage applies when liability coverage exists but is not enough. It may help with the unpaid part of a covered loss, up to the amount allowed by your policy and state rules.
These protections are often shown as UM and UIM. Bodily injury versions may pay eligible medical costs, lost income, funeral costs, and noneconomic damages after a covered crash. Property damage versions may pay for your car or other insured property, but they are not offered or required in every state. Collision coverage may be another way to address car damage.
| Question | Uninsured motorist coverage | Underinsured motorist coverage |
| Does the at fault driver have liability insurance? | No, or no usable coverage can be found | Yes |
| Are the other driver’s limits enough? | No liability limits are available | The limits are lower than the covered loss |
| Which policy receives the claim? | Usually your own auto policy | Usually your own policy after the other policy is considered |
| Can it apply to a hit and run? | Often, subject to state and policy rules | Usually not unless the driver is found and has too little coverage |
| Does it always cover vehicle damage? | No, property damage coverage must apply | No, availability varies by state and policy |
State rules differ. Some states require this protection. Some require insurers to offer it and allow a written rejection. Others treat bodily injury and property damage in different ways. Review your declarations page and ask a licensed insurer or agent to explain what applies where you live.
What Is Uninsured Motorist Coverage?
Uninsured motorist coverage protects eligible people under your policy after a driver without usable liability insurance causes a covered crash. The bodily injury part is commonly called UMBI. A property damage part may be called UMPD.
An uninsured driver may include someone who:
- Has no auto liability policy
- Has a policy that lapsed before the crash
- Has coverage from an insurer that denies protection for that driver or becomes insolvent, if state law and the policy treat the loss as uninsured
- Leaves a covered hit and run without being found
UMBI may cover eligible injury losses for you and covered passengers. Depending on the state and policy, it may also protect a covered person who is struck while walking or cycling. Common eligible losses can include medical care, lost wages, reduced earning ability, funeral costs, and pain and suffering.
UMPD may help pay for damage to your insured car or other covered property. It may have a deductible, a separate limit, and special hit and run rules. Some states do not offer UMPD. Some allow it only when the uninsured driver can be identified. Collision coverage may apply to the car even when UMPD does not.
Suppose a driver runs a red light, injures you, and has no insurance. If the driver is at fault and your policy includes applicable UMBI, you may make a claim with your insurer. Your policy does not create an automatic payment. You must still show fault, injury, covered losses, and compliance with policy rules.
What Is Underinsured Motorist Coverage?
Underinsured motorist coverage protects eligible people when an at fault driver has liability insurance but not enough to pay a covered loss. Its bodily injury form is often called UIMBI. A property damage form may be called UIMPD where available.
Consider a driver who causes serious injuries but carries only the state minimum bodily injury limit. The injured person’s medical costs, lost income, and other covered damages may exceed that limit. The at fault insurer pays only up to its available limit. UIM may then address some of the remaining eligible loss, subject to the injured person’s UIM limit and state rules.
The payment method is not the same in every state. Some policies compare the two drivers’ limits. Other systems focus on the amount of damages left after the at fault insurer pays. Credits, offsets, exhaustion rules, and stacking rules can change the result. Never estimate a UIM payment by subtracting two numbers without reading the policy.
You may need your insurer’s consent before settling with the at fault driver. A settlement can affect your insurer’s right to seek repayment from the person who caused the crash. Give notice before signing a release or accepting a final settlement.
Read what may happen when the at fault driver does not have enough insurance before closing the other driver’s claim.
Why Does the Difference Matter?
The distinction controls which facts you must prove and how the claim moves forward. With UM, the first coverage question is whether any valid liability insurance applies. With UIM, the other driver’s insurer normally handles its part first, then your insurer reviews the remaining claim.
Insurance Research Council data show why both gaps matter. In 2023, 15.4 percent of US drivers were uninsured and 18.0 percent were underinsured. The combined share was 33.4 percent, or about one in three drivers. The rates were estimates based on insurance claim data, not a count of every vehicle on the road.
| IRC finding for 2023 | Estimated share of drivers |
| Uninsured | 15.4 percent |
| Underinsured | 18.0 percent |
| Either uninsured or underinsured | 33.4 percent |
Risk also differs by state. IRC estimated uninsured rates from 5.7 percent in Maine to 28.2 percent in Mississippi for 2023. The underinsured estimate ranged from 4.6 percent in the District of Columbia to 49.7 percent in Colorado. These figures show broad variation, but they do not predict whether a specific driver will cause your next crash.
What Do UM and UIM Bodily Injury Cover?
UMBI and UIMBI focus on harm to people, not routine damage to a car. A covered claim may include:
- Ambulance and emergency care
- Hospital and doctor bills
- Therapy and rehabilitation
- Future medical care supported by evidence
- Lost wages
- Reduced future earning ability
- Funeral expenses after a fatal crash
- Pain and suffering where state law permits it
The displayed limit is the most the insurer will pay, not a promised payment. Split limits may show $100,000 per person and $300,000 per accident. The first caps one person’s claim. The second caps all covered injury claims from one accident.
Personal injury protection or medical payments coverage may pay certain medical costs first, especially in a state with no fault insurance rules. Health insurance, workers compensation, disability benefits, and other sources can also affect billing or repayment rights. Ask the claims adjuster how the coverages coordinate.
Does Uninsured Motorist Coverage Pay for Car Damage?
Not always. Bodily injury coverage pays for eligible injuries. It does not become property coverage because your car was damaged in the same crash.
Vehicle damage may be addressed by:
- Uninsured motorist property damage, if your state and policy provide it
- Underinsured motorist property damage, where available
- Collision coverage, less the collision deductible
- The at fault driver’s property damage liability coverage, if any applies
UMPD and collision can overlap, but their deductibles and claim rules may differ. Your insurer will decide which coverage applies based on the facts and policy. You generally cannot collect twice for the same damage.
The guide on who pays when an uninsured driver hits a parked car explains the common property claim paths.
Does Uninsured Motorist Coverage Apply to Hit and Run Crashes?
It often can, but state and policy rules control the answer. A hit and run driver cannot be checked for liability coverage if the driver remains unknown. Many policies treat an unknown at fault driver as uninsured for bodily injury purposes.
Requirements may include prompt police and insurer notice, proof that another vehicle caused the crash, witness details, cooperation with the investigation, and physical contact in some states.
A driver who swerves to avoid an unknown car and hits a barrier may face different proof rules from a driver whose car was struck. Photograph the scene, save camera footage, gather witness names, and report the facts without guessing.
Follow the steps for filing a car insurance claim after a hit and run if the other driver leaves.
Are UM and UIM Required in Every State?
No. Requirements vary across the United States. The Insurance Information Institute reports that twenty states and the District of Columbia have mandatory requirements for uninsured or underinsured motorist coverage. A state may require one form but not another. It may also require an insurer to offer coverage while allowing the buyer to reject it in writing.
Do not rely on a national list alone. Laws change. Check required limits, property damage options, signed rejection rules, hit and run proof, stacking, and deductibles.
Your state’s department of insurance can explain current rules. A licensed insurer can show how the choices appear on the application. Keep a copy of any selection or rejection form.
How Do UM and UIM Limits Work?
Choose limits by looking at the loss that could affect your household, not only the minimum required by law. A severe injury can cause medical bills, time away from work, long term care needs, and reduced income.
Suppose your policy shows UMBI limits of $100,000 per person and $300,000 per accident. One covered person could have no more than $100,000 available. If three people are injured, the total available for all covered claims cannot exceed $300,000. Proven losses, offsets, and other policy rules may result in a lower payment.
UIM can be harder to estimate. Imagine a covered injury loss of $125,000 and an at fault driver with a $25,000 bodily injury limit. The other insurer may pay $25,000. Your UIM coverage may address part of the unpaid loss, but the maximum depends on your UIM limit and the state’s method for applying credits or comparing limits.
Before buying, ask whether limits are split or combined, whether UM and UIM share a limit, how offsets work, and whether stacking is allowed. Stacking combines limits from more than one insured car or policy. State law may allow, limit, or prohibit it. Never multiply a limit by the number of cars and assume that sum is available.
How Does a UM or UIM Claim Work?
The claim is made under your own policy, but your insurer can still examine fault and damages. Buying the coverage does not remove the need for evidence.
1. Protect people and report the crash
Call emergency services when needed. Report a hit and run or uninsured driver to police as soon as required. Exchange driver, vehicle, and insurance details if the other person stays.
2. Preserve evidence
Take photos of the scene, damage, and injuries. Save camera footage, witness details, and the police report number.
3. Notify your insurer promptly
Notify the insurer promptly that UM or UIM may apply. Ask for a claim number and document list.
4. Verify the other driver’s coverage
For a UM claim, the insurer will seek proof that no usable liability policy applies. For a UIM claim, it will review the other driver’s limits and payments.
5. Document each loss
Keep medical records, bills, wage statements, repair estimates, receipts, and notes about the injury’s effect on daily life.
6. Protect settlement rights
Ask your insurer before signing a release for the at fault driver. A release signed too early could harm a UIM claim or the insurer’s recovery rights.
7. Review the decision
Ask for a written explanation of any denial or reduction. Contact the state insurance department or seek legal advice if a serious dispute remains.
How Is UM or UIM Different From Liability and Collision Coverage?
Each coverage answers a different question.
| Coverage | Main purpose |
| Bodily injury liability | Pays eligible injury claims made by others when you cause a crash |
| Property damage liability | Pays eligible damage you cause to another person’s property |
| UMBI | May pay your covered injury losses when an at fault driver has no usable insurance |
| UIMBI | May pay part of your covered injury loss when the at fault driver’s limits are too low |
| UMPD or UIMPD | May pay covered property damage where offered |
| Collision | May pay for crash damage to your insured car, less the deductible |
Liability coverage protects you against claims from others. UM and UIM protect covered people under your policy from another driver’s missing or low limits. Collision protects the insured car from covered crash damage without paying bodily injury damages.
How Much UM and UIM Coverage Do You Need?
No single limit fits every household. Start by asking what a major injury could cost in medical care and lost income. Then compare available limits and prices using the same policy details.
Consider your health plan costs, income that could stop during recovery, regular passengers, emergency savings, other benefits, state minimum liability limits, stacking rules, and the price difference between limit options.
Many buyers choose UM and UIM bodily injury limits that match their own bodily injury liability limits when available. Matching limits can provide a balanced starting point, but it is not a rule for every driver. Review the total household risk and budget with a licensed insurance professional.
Can You Reject This Coverage to Lower Your Premium?
That depends on state law. Some states allow a written rejection. Before signing one, request equal quotes with and without the coverage. Compare the exact saving with the protection lost, and keep the signed form. Do not reject required coverage. Drivers on a tight budget can ask about payment, discount, and limit choices before removing protection.
Frequently Asked Questions
Both can protect against different gaps. UM applies when no usable liability insurance exists. UIM applies when insurance exists but its limits are too low. State law may require one or both, require an offer, or allow rejection. Check your declarations page and state rules.
Not always. Payment depends on proven damages, your UIM limit, the other driver’s payment, offsets, exclusions, and state law. Your own limit is not a promise that the insurer will pay that full amount.
No. Health insurance may pay eligible medical bills, subject to its own costs and rules. It usually does not pay lost wages, pain and suffering, or car damage. UMBI may address several injury losses after a covered crash.
Possibly. State fault rules may reduce or bar recovery based on your share of responsibility. UM coverage does not remove the need to prove the other driver caused a covered part of the loss.
The answer depends on state rating rules, insurer practices, claim history, and renewal factors. A claim may appear in your insurance history even when you were not at fault. Ask the insurer how state law treats a not at fault UM or UIM claim.
Final Takeaway
Uninsured motorist coverage addresses a covered loss caused by a driver with no usable liability insurance. Underinsured motorist coverage addresses a covered loss when the at fault driver’s liability limit is too low. Bodily injury and property damage forms are separate, and hit and run, stacking, offsets, deductibles, and required limits vary by state.
Check your declarations page, compare UM and UIM limits with your liability limits, and ask how the policy would respond to both an uninsured crash and a low limit crash. Use equal terms when comparing prices and confirm every choice with a licensed insurer. Alias Insurance can help drivers compare available car insurance quotes, while the issuing insurer’s policy and state law control the coverage.
Sources and References
- Insurance Research Council: Uninsured and Underinsured Motorists, 2017 to 2023
- National Association of Insurance Commissioners: Uninsured Motorists
- National Association of Insurance Commissioners: Auto Insurance Consumer Guide
- Insurance Information Institute: Uninsured Motorist Facts and Statistics
- California Department of Insurance: Automobile Insurance Guide
