Uninsured vs Underinsured Motorist Coverage: What's the Difference?

You pay your insurance premiums every month to protect yourself. But what happens when the driver who hits you has no insurance at all — or not enough? That's where uninsured (UM) and underinsured (UIM) motorist coverage come in.

These two coverages sound similar but protect you in different situations. Most drivers carry one without understanding the other — or skip both entirely. Here's what you need to know.

Uninsured Motorist (UM) Coverage

UM coverage kicks in when the at-fault driver has no insurance at all. This happens more often than you'd think — about 1 in 8 drivers is uninsured nationally.

UM covers:

• Your medical bills
• Lost wages
• Pain and suffering
• Vehicle damage (in some states)

It also covers hit-and-run accidents — when the other driver flees and can't be identified.

Underinsured Motorist (UIM) Coverage

UIM coverage kicks in when the at-fault driver has insurance but not enough to pay for your damages.

Example:

• You're hit by a driver with 25/50/25 limits (the state minimum in many states)
• Your medical bills total $80,000
• Their insurer pays their maximum: $50,000
• Your UIM coverage pays the remaining $30,000

Without UIM, you'd be responsible for that $30,000 gap yourself.

Side-by-Side Comparison

Feature	UM Coverage	UIM Coverage
Triggers when	Other driver has no insurance	Other driver has too little insurance
Covers hit-and-run?	Yes	No
Covers medical bills?	Yes	Yes
Covers lost wages?	Yes	Yes
Covers pain & suffering?	Yes	Yes
Covers property damage?	Varies by state	Varies by state
Required by state?	Some states require it	Rarely required

How Much Does UM/UIM Cost?

UM/UIM is surprisingly affordable — often one of the cheapest coverages you can add:

Coverage Level	Average Annual Cost
UM/UIM 50/100	$30–$60
UM/UIM 100/300	$50–$100

For the protection it provides, UM/UIM is one of the best values in car insurance.

States That Require UM/UIM

Several states mandate UM coverage, and some make it harder to reject:

• Required: Illinois, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Virginia, Washington, D.C.
• Optional but must be rejected in writing: Most other states
• Truly optional: A few states like Texas and California (but highly recommended)

UM/UIM vs Collision Coverage

Drivers often confuse these:

• Collision pays for your car regardless of fault — but it doesn't pay your medical bills.
• UM/UIM pays your medical bills and losses when the other driver can't.

They cover different things. You need both for full protection.

Should You Stack UM/UIM?

If you have multiple cars on the same policy, ask about stacked UM/UIM. This multiplies your coverage by the number of vehicles on the policy.

Example with stacked UIM 100/300 on a 2-car policy:

• Stacked limit: $200,000 per person / $600,000 per accident
• Cost increase: roughly 20–30% over unstacked

Stacking is worth it if you have multiple drivers or vehicles on the policy.

The Bottom Line

Carry both UM and UIM at 100/300 if your state allows it. The cost is minimal, and it protects you from the roughly 1 in 8 uninsured drivers and the many more who carry only state minimums. It's one of the highest-value coverages you can add to your policy.

Frequently Asked Questions