Though auto insurance is mandatory in most states, an estimated 12.6% of all drivers in 2019 were uninsured. If you’re hit by one of these uninsured drivers, the typical process of having the at-fault driver’s insurance pay for repairs would not apply because in this case, the at-fault driver would not have insurance. You can protect yourself financially by carrying uninsured motorist coverage with your auto insurance policy, which would have your own auto insurance policy help pay for damages the other driver cannot.
Similarly, underinsured motorist insurance works similarly but is designed to help when the at-fault party does have auto insurance, but not enough to cover all of your damages or expenses.
Some states require these coverages to protect drivers, but even if your state doesn’t mandate uninsured coverage, you may want to purchase it to protect your assets anyway.
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Is Uninsured and Underinsured Motorist Insurance the Same Thing?
Uninsured motorist (UM) coverage and underinsured motorist (UIM) coverage are often sold together, but that is not always the case because while the two types of coverage work similarly, they are not the same thing.
UM protects you if you’re hit by a driver who has no auto insurance at all, where UIM is protection when the driver who hits you has insurance, but it’s not enough coverage to pay for all of your damages or injury expenses. The distinction between whether the at-fault driver is underinsured or not insured at all plays a key role in determining which coverage would kick in to help pay for vehicle repairs and medical bills.
What States Require Uninsured Motorist Insurance?
Auto insurance requirements are different from state to state, so there is not a blanket rule of coverage for the entire country. We have compiled every state that does have UM/UIM requirements in the table below.
State That Requires UM/UIM Insurance | UM/UIM Minimums |
|---|---|
$25,000 per person $50,000 per accident | |
$25,000 per person $50,000 per accident | |
$25,000 per person $50,000 per accident | |
$50,000 per person $100,000 per accident | |
$30,000 per person $60,000 per accident | |
$20,000 per person $40,000 per accident | |
$25,000 per person $50,000 per accident | |
$25,000 per person $50,000 per accident | |
$25,000 per person $50,000 per accident | |
New Hampshire does not require liability insurance coverage but if you do purchase it, you will have uninsured and underinsured motorist insurance within the liability policy | |
New Jersey does not require uninsured or underinsured driver coverage but optional plans can be purchased | |
$25,000 per person $50,000 per accident Underinsured coverage is optional in New York; only Uninsured Motorist coverage is required | |
$30,000 per person $60,000 per accident | |
$25,000 per person $50,000 per accident | |
$25,000 per person $50,000 per accident | |
Pennsylvania does not require this insurance but it can be purchased optionally | |
Rhode Island requires drivers to carry liability insurance but they can decline UM/UIM coverage | |
$25,000 per person $50,000 per accident Underinsured coverage is optional in South Carolina; only Uninsured Motorist coverage is required. | |
$25,000 per person $50,000 per accident | |
Texas does not require UM/UIM coverage, but to reject it you’ll need to do so in writing. | |
$50,000 per person $100,000 per accident | |
Virginia does not require any auto insurance. If you opt out of insurance altogether, you will have to pay a fee of $500 to the DMV. Any auto insurance in Virginia is optional. | |
$25,000 per person $50,000 per accident | |
$25,000 per person $50,000 per accident | |
$25,000 per person $50,000 per accident |
What Does Uninsured Motorist Insurance Cover?
While UM and UIM are a bit different, they’re both there to help pay the same basic bills. In general, UM/UIM insurance commonly covers:
- Damage to your car from a collision with an uninsured or underinsured driver: This is one of the most common uses of UI/UIM. If your vehicle is damaged and the person at fault doesn’t have insurance or doesn’t have enough coverage, your UM/UIM coverage can pick up the expenses. If you don’t have this coverage, you’ll be paying the balance of the costs out of pocket.
- Medical treatment for injuries sustained from a collision with an uninsured or underinsured driver: Medical treatment costs can easily exceed minimum amounts required by your state, especially when you consider the passengers you may have in your vehicle.
- Burial costs if you or your passenger dies as a result of a collision with an uninsured or underinsured driver: It’s not something most people want to think about, but fatal car accidents happen. If the at-fault driver was not insured or underinsured, funeral and burial expenses would be your responsibility without this coverage.
- Lost wages because of injuries sustained from a collision with an uninsured or underinsured driver: Being injured in an auto accident can leave you unable to work for a significant period of time, during which you might not have any income. If you have UM/UIM insurance, some of those wages will be covered and you won’t be looking at a financial hardship in addition to physically recovering.
- Damage and injury to you, your car, or your property from a hit-and-run driver: Whether you’re in your vehicle and sustain injuries in a hit-and-run accident or your car is parked and you’re not around when it’s hit, your UI insurance can step in and cover the expenses and damages.
Not Covered By Uninsured Motorist Insurance
Uninsured motorist and underinsured motorist coverage do not cover any injuries or damages that occur in an accident where you are at fault. Even if you’re the cause of an accident and hit an uninsured driver, and even if they’re legally supposed to have insurance, you’re still at fault so your UM coverage will not kick in.
If an accident is your fault, your liability insurance and your personal health care coverage will be where you turn for financial assistance. If you live in a “no-fault” state, then your personal injury protection (PIP) insurance will pay.
How Does Uninsured Motorist Insurance Work?
UM and UIM insurance coverage are both rolled into your automobile insurance. Because there are differences in each state, you may find that it’s offered when you sign up for insurance and you can decline or accept. Even if you are required to purchase this policy, you will likely have some options on how much coverage you want. There are also states where it’s automatically offered in your auto policy, but you can opt out in writing.
Most people make a decision about UM/UIM when they first get a policy, but if it’s an optional part of your policy, you can decide to drop or add it at any time. You might also be able to adjust the amount of coverage you have at any time.
If you’re in an accident that is not your fault, it’s best to connect with your insurance agent immediately. They will walk you through the steps and get the ball rolling to ensure you file your claims efficiently.
Your UM insurance will automatically step in if you are hit by an uninsured motorist. But if you’re hit by an underinsured motorist, the process could be a bit more complicated. First, their insurance will be tapped to pay for the damages or medical expenses done to you. When you’ve used up that amount, then your UIM coverage will step in to pay the outstanding balances up to your limit.
Limits in Uninsured Motorist Insurance
Limits in insurance are the predetermined amounts of coverage you want to have. If you set higher limits on your insurance coverage, you’ll pay higher premiums.
For example, if you have a limit of $25,000 in uninsured motorist property damage coverage and your car is hit by an uninsured driver and suffers $50,000 in damages, your UM coverage will only pay up to your limit of $25,000. For this reason, if you’re driving an expensive vehicle, you may want to raise your limits to get more protection.
On the other hand, if you’re driving a 10-year old vehicle that isn’t worth $10,000 and you’ve got the required UM of $25,000 and you’re in the same situation, your damages will easily be covered by the policy. Even if your vehicle is totaled, you’ll get the fair value amount for your car. In this situation, the limit for your vehicle damage is enough.
While medical expenses are not as easy to calculate, having higher limits to cover medical bills might be worth the added insurance premiums.
How to File a Claim After a Collision With an Uninsured or Underinsured Driver
If you’re in an accident and discover that the other driver is uninsured or underinsured, follow these steps:
- Call the police and/or ambulance. This is important in all accidents, especially when someone is uninsured. The police report will help you get your expenses covered and will help the claims process go more smoothly. If you are injured, make your first call to 911 and they will dispatch an ambulance. If your injuries are severe, you might not be able to follow through on the other steps and will need to rely on the police report.
- Don’t accept money. If they’re illegally uninsured, they may want to avoid legal trouble by offering cash. At this point, you don’t know what your damages are or if there are injuries you’ll discover later. If you accept the other driver’s cash, you might not be able to follow through with a claim.
- Exchange information. Get their insurance information, if they have any. Also, make sure to get their name and contact information. If possible, take a picture of their driver’s license. Make sure to give them your insurance information as well.
- Take pictures. Take pictures of their license plate, the vehicle, damage to both vehicles, and where the accident happened.
- Call your insurance agent. Report the accident to your insurance company as soon as possible. Follow up with an email that includes your photos, contact information for the police officer on the scene (and a police report, if it’s available), the information on the other individual, and a narrative of the accident from your point of view.
- Get the paperwork and file the claim. Your insurance agent will likely have paperwork for you to complete and they’ll ask follow-up questions. No coverage is paid until the claim is processed.
- Get estimates and collect expenses. If you’re seeing a doctor, begin collecting doctors’ records and bills. As far as your vehicle is concerned, get a few estimates on the cost of repairs and submit them to your insurance. Ask your agent if you’re authorized to go ahead with repairs.
How to File a Claim After a Hit and Run
If your vehicle is involved in a hit-and-run, the steps will be the same as they are if the at-fault vehicle stuck around, with the only difference being that you’re not going to have all of the information.
If the driver and vehicle have left, you won’t have their name and contact information, nor will you have insurance information and pictures of their vehicle. Instead, do what you can to record what you remember immediately afterwards, such as the what the vehicle and driver looked like, and document the evidence you see at the site. Make sure to call the police because fleeing the scene of an accident is also a crime and if the person is found, they will face a fine or charges.
Should You Add Uninsured Motorist Insurance to Your Auto Policy?
If you’re considering adding uninsured and underinsured motorist insurance to your auto policy, here are some things to keep in mind:
- Driving habits. If you almost never drive, then this insurance coverage might not be worth it. But if you’re on the road regularly, you’re increasing your odds of being in an accident with an uninsured or underinsured driver, making this coverage worthwhile.
- Location. If you live in an urban area and park on the streets, a hit-and-run is more likely and UM/UIM insurance is worth it. But if you live in a rural area with few other drivers around, then your odds of a hit-and-run are pretty small so it may not be worth the extra expense if it’s not mandatory.
- Vehicle value. Do you feel you can easily manage damage costs for your vehicle, or do you think the costs would be excessive? For example, older cars may cost less to repair than newer cars with intricate electronics.
- Carpool and passengers. One of the biggest benefits of UM/UIM is the added coverage for injuries to you and your passengers. If you carpool or carry passengers a lot, this can be a good reason for this added coverage.
- Your health insurance and other coverage. Your health insurance and any additional disability insurance you have will typically pay for your medical bills due to a car accident, but you’ll be subject to the limitations of your insurance. This means you’ll have a cap on expenses, and you’ll have a deductible to pay. However, this might be okay with you rather than paying another auto insurance premium, or it might be a reason you believe getting UM/UIM is worth it.
Checking with your state on their requirements is the first step when considering UM/UIM. After that, it’s a good idea to contact a trusted insurance agent to see what coverage you currently have and what your options are. This can help you make a decision on this coverage.