MS&H Blog

What Is Uninsured and Underinsured Motorists Coverage?

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Uninsured motorists (UM) coverage reimburses victims for certain damages resulting from a car accident caused by an uninsured driver.

An uninsured driver can fit one of the following descriptions:

  • Their vehicle is not insured for bodily injury liability,
  • Their insurance company denies coverage, or
  • They cause an accident and flee the scene.

For UM coverage to apply, the uninsured driver must be at fault for the accident.

Underinsured motorists (UIM) coverage helps pay the gap between an at-fault driver’s liability insurance coverage and your damages, up to your chosen limit.

An underinsured driver has auto insurance, but their auto liability limits are lower than both your damages and UIM limit.

The rules vary by state, but generally, UIM coverage helps to close the gap between what the at-fault driver’s insurer will pay and your actual damages.

The Benefits of UM and UIM Coverage

If you sustained injuries in a car accident, your medical bills could add up quickly. For more serious injuries, those costs will rise even higher. Even if you live in a no-fault state, your medical expenses could exceed your coverage limits.

UM and UIM coverages can help pay those medical expenses and other damages that might otherwise go unpaid. If covered, your policy would pay the claims that you would have made against the at-fault driver.

Some states require you to maintain a minimum amount of UM/UIM coverage on your personal auto policy.

We recommend that you carry matching Uninsured underinsured coverage limits equal to your own personal liability limits and if you carry a personal umbrella policy we recommend that you carry matching uninsured underinsured coverage limits equal to your umbrella liability limits.

What to Do After an Accident with an Uninsured Driver

Your personal auto policy documents outline your duties after an accident. If you get into an accident with an uninsured driver:

  • Call the police, especially if the accident was a hit-and-run.  We always recommend obtaining a police report as this will provide pertinent information regarding the at fault drivers insurance carrier code.
  • Do not accept money from the driver. There’s no guarantee that the money the driver offers will be enough to cover their liability. Accepting money from an at-fault driver could affect your insurance company’s ability to subrogate, and, as a result, its ability to pay your claim.
  • Notify your insurance company as soon as possible. Your insurer may ask you for the other driver’s insurance information. Let them know if the other driver was uninsured.  It is possible for your insurance carrier to deny benefits under UM and UIM if you do not report the accident right away.
  • Cooperate in the investigation of the claim. If requested, submit a proof of loss and any legal papers, and authorize the release of medical records to the insurance company.

Through subrogation, insurers recover the amount they pay to a policyholder from an at-fault party.

After the insurance company pays benefits to a policyholder, they can try to recoup some or all of the payments from an at-fault driver’s liability insurance. Because it’s difficult to recover payments in UM/UIM claims, insurance companies handle those claims differently.


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