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Uninsured/underinsured motorist coverage: which do I need?

Fact-checked with HomeInsurance.com

All states require some form of vehicle insurance to protect other parties and their property if you cause an accident. The required insurance is typically liability coverage, meaning your insurance would pay for any injuries and damages you cause in a crash. The problem is, some people don’t follow the law and are driving around with no car insurance. 

A study found that one in eight drivers on the road don’t have car insurance. And in the states of Florida, Mississippi, Michigan, New Mexico and Tennessee, 20 percent to 26.7 percent of drivers don’t have vehicle insurance. Your chances of getting stuck having to pay for your injuries and car damages out of pocket in Florida are high — based on the study, one in four Florida drivers are uninsured.

Fortunately, insurance companies sell uninsured motorist (UM) and underinsured motorist (UIM) insurance coverage that will protect you from such a situation. If you have uninsured or underinsured motorists coverage, your own insurance company will step in to cover your expenses when the other driver fails to. Learn more about uninsured and underinsured motorist coverage and how they work.

How uninsured/underinsured coverage works

When you buy the extra coverage, you expand your financial protection in case of an accident. You’re already required to have liability insurance, which will pay for any damages or injuries you cause. Adding UM/UIM will pay for damages and expenses caused when someone else is at fault but doesn’t have enough coverage (or any at all). Take a look at the difference between uninsured/underinsured motorist coverage.

What is uninsured motorist coverage?

UM is similar to UIM, except it pays for 100% of your damages and injuries in case the other driver has no insurance at all. 

What is underinsured motorist coverage?

Underinsured motorist coverage steps in to pay for damages above what the other driver’s insurance covers. Most states have minimal amounts of liability insurance required. 

For example, California’s property liability minimum is $5,000. If you drive a new Tesla in California and someone crashes into your car, you can bet that the $5,000 property damage coverage the other party may have isn’t enough for all the repairs. If they do significant damage to your electric vehicle, your UIM coverage would pay above the $5,000 the other insurance company would pay.

FeatureUninsured motorist coverage (UM)Underinsured motorist coverage (UIM)
Pays for bodily injuryAvailableAvailable
Pays for property damageAvailableAvailable
ReimbursementPays for 100% of your claim if the other driver has no insurancePays your damages/expenses above what the other driver’s insurance covers
Can be purchased separatelyDepends on stateDepends on state

State requirements for UM/UIM coverage

Each state has its own rules on uninsured and underinsured motorists coverage. While not all states require these types of coverages – some do. Here’s a look at what each state requires when it comes to these coverages:

Uninsured motorist coverage (UM)Underinsured motorist coverage (UIM)
Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut
Delaware

Florida

Georgia

Hawaii

Idaho

Illinois
Indiana

Iowa

Kansas
Kentucky

Louisiana

Maine
Maryland
Massachusetts
Michigan

Minnesota
Mississippi

Missouri
Nebraska
Nevada

New Hampshire
New Jersey
New York
North Carolina
North Dakota
Ohio

Oklahoma

Oregon
Pennsylvania

Rhode Island
South Carolina
South Dakota
Tennessee

Texas

Utah

Vermont
Virginia
Washington

Washington, D.C.
West Virginia
Wisconsin
Wyoming

Should you get underinsured or uninsured motorist coverage?

As you can see in the table, uninsured/underinsured motorist bodily injury and property damage coverage isn’t required in all states. Even if it isn’t, if you have a newer car, you may want to add the optional coverage. Think about it — Florida, the state where 26.7 percent of drivers don’t have any car insurance at all, doesn’t require UM/UIM coverage. Do you really want to drive around without any UM/UIM insurance in Florida?

Why choose Uninsured Motorist Coverage

  • If you live in a state with a high number of uninsured motorists
  • If you can’t afford to pay out of pocket for your injuries or damages in a car crash
  • If you don’t have collision coverage

Why choose Underinsured Motorist Coverage

  • If you live in a state with a high number of uninsured motorists
  • If your vehicle is higher in value than the state’s minimum liability coverage amounts
  • If you can’t afford to pay out of pocket for your injuries or damages in a car crash
  • If you don’t have collision coverage

Alternatives to UM/UIM

If you have good health insurance coverage, you may not need to add uninsured/underinsured motorist bodily injury coverage. Your health insurance will pay for your medical bills if you’re in an accident.

You may have noticed collision coverage mentioned. The optional coverage can be added to protect your vehicle and property against damages from collisions if you’re in a car accident. It could be a good alternative to UM/UIM insurance to protect your property.

The takeaway

  • Uninsured motorists account for one in eight drivers in the U.S.
  • If you’re in an accident with an uninsured or underinsured driver, you’ll have to pay for your medical bills and damages yourself — even if they’re at fault.
  • You can purchase uninsured/underinsured motorist insurance that will pay for your expenses if you’re left having to pay for damages yourself.
  • Some states require all drivers to have uninsured underinsured motorists coverage.

Don’t rely on others to do the right thing. Protect your property by making sure you have enough coverage to protect yourself and your loved ones in a variety of events. UM and UIM insurance add another layer of financial protection in an accident if it turns out the person at fault doesn’t have enough coverage to pay for your expenses and losses.

Cynthia Paez Bowman

Writer

Cynthia splits her time between Los Angeles, CA and San Sebastian, Spain. She travels to Africa and the Middle East regularly to consult with women’s NGOs about small business development.

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