What Is Uninsured Motorist Coverage?

Uninsured Motorist Coverage Explained

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Uninsured motorist coverage pays your medical bills after an accident in which the at-fault driver either has no coverage or has insufficient coverage, or in the case of a hit-and-run accident. Some states require drivers to carry uninsured motorist coverage, but it can be a savvy addition to your auto insurance no matter where you live.

Learn more about what uninsured motorist coverage is, how it works, what it covers, and what to expect if you need to make a claim. Understanding the ins and outs of uninsured motorist coverage will help you feel confident in case of an accident with an uninsured driver.

Definition and Examples of Uninsured Motorist Coverage

Carrying valid auto insurance is a legal requirement to drive in 49 states—but that doesn’t mean every driver is insured. If you get into an accident with a driver who has no insurance or whose insurance is insufficient, uninsured motorist coverage helps you pay for damages.

While the idea behind uninsured motorist coverage is fairly simple—insurance coverage that pays out when the at-fault driver is unable to—this kind of coverage can take several different forms:

  • Uninsured motorist (UM) insurance: This type of coverage pays the medical bills for you and any passengers in your car if you are in an accident where the at-fault driver does not have liability insurance. It also covers lost wages if the accident requires recuperation time away from work, and kicks in if you are a pedestrian hit by an uninsured driver or in a hit-and-run. UM insurance is also known as uninsured motorist bodily injury (UMBI) insurance. One caveat: UM coverage does not cover property damage.
  • Uninsured motorist property damage (UMPD) coverage: This type of insurance covers the cost of repairs or replacement if your car is hit by an uninsured driver. It may also pay for repairs to your home or other property (such as a fence) that is struck and damaged by an uninsured motorist.
  • Underinsured motorist (UIM) protection: This coverage kicks in when an at-fault driver does carry liability insurance, but not enough to pay for the full extent of the damage. 

What Does Uninsured Mean?

Insurers offer multiple coverage options to protect against uninsured motorists in part because “uninsured” can have more than one meaning. The typical uninsured motorist is a driver who carries no coverage at all. Though insurance is required in 49 states, approximately one out of every eight drivers does not carry auto insurance, according to the Insurance Information Institute—and in some states, it’s as many as one out of every five drivers.

However, you may need this kind of coverage even if the other driver has some coverage. Someone who carries the legally required liability insurance, but whose coverage levels are too low to pay for the damages they caused, is known as an underinsured driver. 

Finally, the at-fault driver may not stick around long enough after an accident to be identified. These kinds of hit-and-run situations may involve an insured driver, but if you can’t identify them, there’s no way to get them or their insurance company to pay for your damages. In this case, your UM coverage would cover your costs.

How Uninsured Motorist Coverage Works

Under normal circumstances, if you are in an accident where the other driver is at fault, you’d file a claim with the at-fault driver’s insurance company to pay for your car’s repairs and any medical bills or lost wages incurred as a result of the accident. But if the at-fault driver has no insurance, has insufficient insurance, or leaves the scene of the accident, how do you pay for the damages they caused?

While you could sue the at-fault driver for the damages that their insurance would normally cover, it’s unlikely to pay out. Someone who carries no insurance or insufficient insurance probably does not have the assets necessary to cover the costs. This is also a non-starter if you are the victim of a hit-and-run accident, since you can’t sue an unidentified driver. Instead, you’d file a UM claim with your own insurer.

If you need to file a claim for uninsured or underinsured motorist coverage, you’ll need to do so within a time limit that may be as short as 30 days. Determining your need and filing the claim quickly can be somewhat complicated in the case of an underinsured motorist, since you may not know the full extent of your injuries or damages right away.

Most insurance companies won’t allow you to carry more uninsured/underinsured motorist coverage than you carry for your own liability coverage.

What Is the Average Deductible for Uninsured Motorist Coverage?

Each insurer has its own deductible levels for uninsured motorist coverage, and states may have specific rules governing deductibles for this kind of coverage. For instance, in New Jersey, all uninsured and underinsured motorist property damage claims require a $500 deductible, while South Carolina claims typically have a $200 deductible. 

Increasing your deductible may help you reduce your UM and UIM premium costs by increasing your deductible, although these policies are generally inexpensive to begin with.

What Does Uninsured Motorist Insurance Cover?

Uninsured and/or underinsured motorist coverage can help pay costs when:

  • You are in an accident where the at-fault driver carries no insurance.
  • You are in an accident where the at-fault driver carries insufficient insurance.
  • You are struck in a hit-and-run.
  • You are in an accident with the driver of a stolen car. Even if the car itself was insured, it is considered uninsured if the driver did not have permission to use the car at the time of the accident.

This kind of coverage can pay for medical expenses, lost wages, pain and suffering, and possibly related damages to your car, if applicable in your state. 

Do I Need Uninsured Motorist Coverage?

Uninsured and/or underinsured motorist coverage is a legal requirement for drivers in 20 states, although it can be a good idea for drivers everywhere. 

The coverage tends to be relatively inexpensive, although it may cost more in states with higher percentages of uninsured drivers. For instance, Mississippi had the highest estimated percentage of uninsured drivers in the country (29.4%) in 2019, and it’s likely that UM coverage, which is not legally required there, will be more expensive than in other states with lower percentages of uninsured motorists.

Drivers in states with high numbers of uninsured motorists may need this coverage more than those in states with more insured drivers, since the likelihood of getting into an accident with an uninsured motorist is higher when there are more of them behind the wheel.

Additionally, paying for this coverage can give you peace of mind that you will not be on the hook for major financial damages after an accident with an uninsured driver.

What to Expect From an Uninsured Motorist Claim

When you file an uninsured motorist claim, your insurance company will “stand in the shoes” of the uninsured or underinsured driver—and it will only pay the claim if the uninsured driver is at fault in the accident. 

Depending on your state’s comparative negligence laws, which assign the degree of fault to each individual involved in an accident, your degree of fault in an accident with an uninsured driver can affect the claim payout you may receive.

For instance, if you live in New Jersey, you may only collect damages from your uninsured or underinsured motorist coverage if your degree of liability does not exceed that of the other driver or drivers involved in the accident, and your insurer may reduce the claim payout awards you by the percentage of fault assigned to you.

Key Takeaways

  • Approximately one out of every eight drivers does not carry auto insurance, and getting into an accident with such a driver could leave you on the hook to pay for your damages.
  • Uninsured and/or underinsured motorist coverage is required in 20 states, and can help you pay for the damages from an accident with an at-fault uninsured driver or a hit-and-run.
  • This kind of coverage is generally inexpensive and will cover medical expenses, lost wages, and pain and suffering. In some states, it may also cover related damages to your car.
  • When you file an uninsured motorist claim, your settlement may be reduced if you are assigned any degree of fault for the accident.