Uninsured and Underinsured Motorist Coverage: A Closer Look
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In this article
Millions of U.S. drivers are uninsured. Learn what UM/UIM coverage is, what it pays for, and why it's worth understanding even if it's optional in your state.
Key Takeaways
- Roughly one in eight U.S. drivers is estimated to carry no auto insurance at all.
- UM coverage applies when the at-fault driver has zero insurance; UIM applies when their coverage limit is too low.
- Both coverages typically include bodily injury protections and, depending on the state, property damage.
- Many states require insurers to offer UM/UIM coverage, but not all require drivers to carry it.
- Stacking — combining limits across multiple vehicles — may be allowed in some states, increasing your protection.
- UM/UIM coverage is generally considered a cost-effective layer of financial protection for most drivers.
Why the Coverage Exists
Auto liability insurance is legally required in nearly every U.S. state, yet a meaningful share of drivers on the road carry none. According to the Insurance Research Council, an estimated one in eight drivers in the United States is uninsured at any given time — and that figure climbs higher in certain states. Even among insured drivers, many carry only the state-required minimum, which can fall well short of covering a serious accident.
That's the problem UM/UIM coverage is designed to solve. When another driver causes an accident and can't pay — either because they have no policy or an inadequate one — this coverage steps in so you're not absorbing someone else's financial failure. For a deeper look at how the full range of auto coverage types fits together, see Auto Insurance Decoded.
1 in 8
U.S. drivers estimated to be uninsured
According to the Insurance Research Council, approximately 12–13% of U.S. motorists drive without any auto insurance coverage.
26%
Uninsured driver rate in some high-risk states
The Insurance Research Council has found that certain states see uninsured driver rates exceeding one in four motorists, well above the national average.
$25,000
Typical state minimum liability limit (bodily injury, per person)
Many states set bodily injury liability minimums at $25,000 per person — an amount that can be exceeded quickly by emergency room visits alone.
How UM and UIM Work Differently
Uninsured motorist (UM) coverage activates when the at-fault driver has no insurance at all — including most hit-and-run situations, though state rules on hit-and-run vary. Underinsured motorist (UIM) coverage comes into play when the other driver does have insurance, but their policy limits aren't high enough to cover your medical bills, lost wages, or other compensable losses.
Both types commonly include a bodily injury component, which covers medical expenses, rehabilitation, lost income, and pain and suffering for you and your passengers. Some states also offer or require uninsured motorist property damage (UMPD), which pays for vehicle repairs when the at-fault driver is uninsured — though this varies widely by state.
UIM doesn't pay on top of the other driver's policy; it fills the gap. If the at-fault driver carries $25,000 in liability coverage and your damages total $60,000, your UIM coverage can potentially pay the remaining $35,000 — up to your own policy limit. Understanding this distinction matters when choosing your coverage limits. The auto insurance terms glossary defines these and other key policy terms in plain language.
Match Your UM/UIM Limits to Your Liability Limits
A common rule of thumb among insurance professionals is to set your UM/UIM limits equal to your liability limits. If you carry $100,000/$300,000 in liability coverage, consider matching that on the UM/UIM side. Lower UM/UIM limits can leave a gap even when you've invested in higher overall coverage.
State Rules and What to Watch For
Coverage requirements differ significantly from state to state. Some states mandate both UM and UIM; others require only UM; and some require insurers to offer the coverage but allow drivers to reject it with a signed waiver. A handful of states have no UM/UIM mandate at all.
One important nuance is stacking. In states that permit it, you can combine the UM/UIM limits across multiple vehicles on your policy. For example, if you have two cars each with a $50,000 UIM limit, stacking could give you up to $100,000 in available coverage per accident. States that prohibit stacking prevent this approach, so it's worth confirming whether your state allows it before assuming you have that flexibility.
Drivers who rely only on state minimum liability coverage — without UM/UIM — face a real exposure if struck by an uninsured driver. The article on state minimum vs. full coverage explains how those gaps can emerge in practice.
Coverage Rules Vary Significantly by State
Because UM/UIM requirements, stacking rules, and UMPD availability differ so widely across states, information found online may not reflect the rules that apply to your specific policy. Always verify current requirements with your state's department of insurance or a licensed insurance agent before waiving any coverage.
Making Sense of Your Own Policy
When reviewing your auto policy, UM and UIM limits are typically listed as split limits (e.g., $100,000 per person / $300,000 per accident) or as a single combined limit. These limits are separate from your liability limits — they protect you, not other drivers.
A common misconception is that health insurance makes UM/UIM redundant. In reality, health insurance doesn't cover lost wages, vehicle damage, or non-economic losses like pain and suffering. It also may come with deductibles and co-pays that UM/UIM can help offset, depending on your state and policy terms.
Because UM/UIM coverage is generally among the more affordable add-ons in a standard auto policy, many insurance professionals consider it a cost-effective layer of protection — though your specific premium will depend on your state, driving history, and selected limits. Drivers who've made assumptions about what their policy covers without checking the details may want to review common auto insurance misconceptions for a useful reality check.
This article is for general informational purposes only and does not constitute insurance, legal, or financial advice. Coverage availability, requirements, and terms vary by state and insurer. Consult a licensed insurance professional and review your actual policy documents before making coverage decisions.
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Autos & Insurance Editorial Team
Autos & Insurance Editorial Team is the collective byline for our editorial team and contributor network. Articles published under this byline or an editorial pen name are researched, written, and reviewed according to our editorial standards for clarity, consistency, and independence before publication.
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