Uninsured Underinsured Motorist Coverage: Complete Guide

By Randy Luton | Last Updated: 03/11/2024

Key Insights

  • Uninsured and underinsured motorist coverage plays an important role in hit and run cases which is very common nowadays.
  • This coverage is to help you pay all the expenses of hospital and repair if the other driver is incapable to pay.
  • An uninsured motorist is different from an underinsured motorist but both are covered in one policy.
  • This insurance is compulsory in some of the states of our country like Connecticut, Illinois, and Nebraska.

What if someone hit your car and left without giving any details? Or what if someone hits you but does not have enough insurance to cover your expenses? In such conditions; uninsured underinsured motorist coverages come into the picture.

Most of the drivers in our country are not aware of uninsured and underinsured motorist insurance. Hit and run are very common in any state or country and the cost of medical bills after that is unbearable for a common middle-class driver. 

Hence RateForce decided to write this detailed guide to help you understand everything you need to know about UM insurance coverage. Let’s start with a quick introduction.

What is uninsured/underinsured motorist coverage?

So what exactly is this coverage type and why is it so important for the drivers? Let’s understand this with an example

  • Consider a car that hits your car late at night and drives away quickly. So you didn’t get the time to note down the details of the car. Now you are driving on a lonely highway so there might not be any camera to get the details. So what will you do? You will have to pay for your medical bills and repair expenses on your own.
  • Or another situation can be, you got the details of the driver but he or she does not have enough coverage to pay your claims. Again you will have to pay from your pocket.

In both of the situations, if you had uninsured or underinsured motorist insurance then you would have got covered. Your insurance company would have to pay for the expenses and medical bills.

So in simple terms, uninsured or underinsured motorist coverage will cover your medical bills or repair expenses when the other driver is not capable.

How does uninsured/underinsured motorist coverage work?

So now you got out of the accident; you have a huge hospital bill plus the expense of car repair. If you have uninsured motorist coverage then you don’t have to worry about all these bills.

All you have to do is inform your insurance agency within 30 days of your accident. You will be asked to provide a statement of the accident.

Then the company will first try to contact the insurance company of the other driver. If the coverage of that driver is not enough to pay your bills then your insurance carrier will cover all the expenses. They will ask you to file a claim and after the investigation, your claim will be released.

Step by step process of how to claims an uninsured underinsured motorist coverage:

  1. Check what cover you will need; do you need medical coverage or you are safe? Do you need only repair coverage or your car is totaled?
  2. File the claims for the coverage of your medical bills as well as the repair expenses based on your requirements.
  3. If the other driver is not insured or the liability insurance is not enough then you can contact your insurance carrier to inform them about the situation.
  4. Your insurance company will either try to contact the other driver’s carrier or will wait for their response.
  5. Once your insurance company is sure that the other driver’s company can not cover your claim. Your company will start their investigation.
  6. After the company is sure that the claim is valid they will release your claim money as soon as possible.

What is the difference between uninsured and underinsured coverage?

If you are thinking that uninsured and underinsured coverage are the same then you are mistaken. Uninsured motorist coverage is useful in cases where the at-fault driver does not have liability coverage. 

Liability coverage is the minimum compulsory requirement of each state. If a driver is driving with expired insurance or without insurance. In such a situation the insurance company of that driver might not be able to cover your expenses. So your insurance company will come forward to cover all the expenses. This is important if the damage is high in the accident and the coverage limit is low for the at-fault driver.

Let’s say your car is totaled in the accident and the driver has coverage of $3000. In such a situation, you will have to pay for the damages from your pocket. But if you have underinsured motorist coverage then your insurance company will pay for the rest of the expenses.

What is the average cost of uninsured motorist insurance?

The cost of uninsured motorist insurance depends on a lot of factors. These factors include the age of the driver, the area where he or she lives, the car type, etc. Overall it is safe to say that adding uninsured motorist coverage will not be too expensive.

In general, the cost of UM coverage is around 5% of your annual premium rates. When this cost is compared with the amount of coverage you receive; you will find that the benefit is impressive. 

For example, your annual premium is $900 now you will have to pay $45 extra to get the uninsured motorist coverage. And in return for paying $45, you will get coverage of $100,000 in case of an accident by an uninsured motorist.

If you want to get the lowest car insurance rates for your profile then the best option is to compare the rates. Get the quotations from different companies and compare the rates to check which one provides the cheapest price.

Uninsured and underinsured motorist coverage for different states

Now let’s have a look at how different states charge for this coverage. While the uninsured and underinsured motorist coverage is optional in most of the states; it is compulsory in 18 states. Here is the list of all the states where this coverage type is compulsory along with the requirements of that state:

StateUninsured/Underinsured Motorist Coverage Requirements
Connecticut$25,000 per person/$50,000 per accident.
Illinois$25,000 per person/$50,000 per accident.
Kansas$25,000 per person/$50,000 per accident.
Maine$50,000 per person/$100,000 per accident.
Maryland$30,000 per person/$60,000 per accident.
UMPD/UIMPD required: $15,000 per accident.
Massachusetts$20,000 per person/$40,000 per accident.
Minnesota$25,000 per person/$50,000 per accident.
Nebraska$25,000 per person/$50,000 per accident.
New HampshireUMBI/UIMBI required: $25,000 per person/$50,000 per accident.
UMPD/UIMPD required: $25,000 per accident.
New York$25,000 per person/$50,000 per accident.
North CarolinaUMBI required: $30,000 per person/$60,000 per accident.
UMPD required: $25,000 per accident.
North Dakota$25,000 per person/$50,000 per accident.
Oregon$25,000 per person/$50,000 per accident.
South CarolinaUMBI required: $25,000 per person/$50,000 per accident.
UMPD required: $25,000 per accident.
South Dakota$25,000 per person/$50,000 per accident.
VermontUMBI/UIMBI required: $50,000 per person/$100,000 per accident.
UMPD/UIMPD required: $10,000 per accident.
Virginia*UMBI/UIMBI required: $25,000 per person/$50,000 per accident.
UMPD/UIMPD required: $20,000 per accident.
Washington, D.C.UMBI required: $25,000 per person/$50,000 per accident.
UMPD required: $5,000 per accident.
West VirginiaUMBI required: $25,000 per person/$50,000 per accident.
UMPD required: $25,000 per accident.
Wisconsin$25,000 per person/$50,000 per accident.
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Compare and get cheap uninsured coverage in your state.

Does uninsured motorist insurance cover a hit-and-run?

Hit and run can be when a driver hits your car and runs away or when a driver hits you and runs away. In both situations; the area where you live plays an important role in deciding if you can use your UM insurance.

Some states allow the drivers to use UM coverage for hit and run accidents but with a deductible amount. Moreover; some states don’t allow the drivers to use UMPD coverage for hit and run damage. It is always advisable to contact your insurance company to make things clear.

Following is the list of all these states in our country:

Types of uninsured and underinsured motorist coverage

Just like liability insurance, uninsured or underinsured motorist coverage is also divided into two parts; Property damage and bodily injury.

Underinsured/ Uninsured Motorist Bodily Injury Coverage (UMBI/UIMBI)

This coverage type is for the situations where the driver or the passengers in the car are affected. The insurance company will provide coverage for medical bills, pain and suffering coverage as well as lost wages of the driver or passengers.

It is important to make a note that Medical Payment (Med Pay) or Personal injury protection can not be compared with UMBI or UIMBI. The coverage from a Med Pay or PIP might not be enough in some accidents. UMBI insurance provides higher coverage.

Underinsured/ Uninsured Motorist Property Damage Coverage (UMPD/UIMPD)

As the name suggests, this coverage type is to cover your repair expenses if someone hits your car and can not cover the bills. Let’s say the other driver is uninsured or has low coverage limits and the repair expense of your car is going to be huge. Then you will have to pay for all the repair expenses from your pocket.

In such situations, uninsured or underinsured motorist property damage coverage comes into the picture. This can also assist you in collision deductibles and rental car costs. 

What is the meaning of stacking the uninsured motorist coverage?

Stacking your uninsured motorist coverage can be an amazing perk for every driver who has more than one car. The drivers in some states are allowed to stack the underinsured motorist bodily injury or uninsured motorist bodily injury coverage. Stacking your insurance means you have to pay a bit more premium and raise the limits. The raise in limit will be based on the number of vehicles you have insured.

Let’s consider Stuart for example; Stuart has three cars in his household. Whenever he’ll use his coverage, now he gets a UMBI limit for each car as 100/300. So in case of an accident he and his passengers can get $100,000 per person and $300,000 per accident. But if he stacks his UMBI coverage then his limits can increase to 300/900 for UMBI coverage. 

There is no limit on the number of cars you can stack. But this is only limited to cars per household you can not stack with your friend or neighbor’s car. It is important to note that not all insurance companies provide stacking options. Make sure to check this with your company before making your decision.

FAQs about uninsured and underinsured motorist coverage

  • I have health coverage, do I need uninsured and underinsured motorist coverage?

    In some states this coverage is compulsory but even if it is not compulsory in your state this coverage is beneficial. You have health insurance but what about the passenger in the car? And what about expenses to repair the car? This coverage will save you money in situations where you were not at fault.

  • Is uninsured motorist coverage included in the umbrella policy?

    No. Most of the umbrella policies do not provide coverage to uninsured motorists. It is majorly for the property damage or the bodily injury caused by the driver.

  • Will my premium increase after an uninsured motorist claim?

    Yes, the majority of states and their companies increase the insurance premium rates after underinsured or uninsured motorist claims. On average, the premium will rise by 9.32% after the claim.

  • Can I sue an underinsured motorist?

    It depends on the laws of your state. To get the real facts about suing an underinsured motorist you will have to check this with your state’s regulation. For example, California Government allows the people injured in the car accident to sue the underinsured motorist.

Over to You!

Now that you know why underinsured and uninsured motorist coverage is important it’s time to buy your policy. But before you finalize any one insurance carrier make sure to check the average car insurance rates in your state. This will help you to compare the rates from different insurance companies and get lower rates.

Want to buy uninsured underinsured insurance at lower rates? Don’t forget to check for car insurance discounts for your profile. If you still need some assistance then RateForce have experts for you. Get in touch with us today to resolve all your queries about car insurance.

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Editorial Guidelines: The above is meant as general information to help you understand the different aspects of auto insurance. This information does not refer to any specific auto insurance policy. Coverages and other features vary between insurers, vary by state, and are not available in all states. References to costs of coverages/repair, average or typical premiums, amounts of losses, deductibles, etc., are indicative and may not apply to your situation. We encourage you to speak to our insurance representative and to read your policy contract to fully understand your coverages.

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Randy Luton is the Founder and CEO of RateForce. He is passionate about InsurTech services and has in-depth knowledge about the auto insurance sector of the USA.