What Is UM/UIM Coverage and Why Does It Matter?

Uninsured motorist (UM) coverage pays for your injuries and damages when an at-fault driver carries no auto insurance at all. Underinsured motorist (UIM) coverage kicks in when the at-fault driver does have insurance, but their policy limits aren't high enough to cover your full losses. Together, UM/UIM is one of the most powerful — and often overlooked — protections you can add to your auto policy.

The numbers make a compelling case for carrying this coverage. According to the Insurance Research Council's 2025 report, 15.4% of U.S. motorists were uninsured in 2023 — that's more than 1 in 7 drivers on the road, up from 12.6% in 2019. Even more striking: when underinsured drivers are included, 1 in 3 U.S. drivers (33.4%) were either uninsured or underinsured in 2023 — a 10 percentage point increase since 2017. Some states are far worse: Mississippi tops the list at 28.2%, followed by New Mexico at 24.1%, and Washington D.C. at 23.1%. When you consider that nearly one in five injury accidents involves losses exceeding the at-fault driver's coverage limits, the protection gap becomes impossible to ignore.

What UM/UIM Coverage Protects You Against

UM/UIM coverage is designed to step in when the at-fault driver's insurance falls short — or doesn't exist at all. Here's what it covers:

• Uninsured drivers — Drivers who carry zero auto insurance
• Underinsured drivers — Drivers whose limits are too low to fully compensate your losses
• Hit-and-run accidents — In most states, a hit-and-run is treated as an uninsured motorist scenario, allowing you to file a UM claim
• Injuries to passengers — Your coverage extends to anyone riding in your vehicle at the time of the accident

Without UM/UIM coverage, your only recourse after being hit by an uninsured driver is to sue them personally — which rarely results in meaningful compensation since most uninsured drivers lack the financial assets to pay. Your health insurance may cover some medical bills, but it won't compensate you for lost wages, pain and suffering, or vehicle damage. Learn more about how personal injury protection and MedPay coverage compare as supplemental options for medical costs.

UMBI vs. UMPD: The Two Types of UM/UIM Coverage

Just like standard liability insurance, UM/UIM coverage is split into two distinct components — one for injuries and one for property damage.

Uninsured Motorist Bodily Injury (UMBI)

UMBI is the more critical of the two. It covers:

• Medical expenses for you and your passengers
• Lost income if injuries keep you out of work
• Pain and suffering damages
• Funeral costs in fatal accidents

UMBI typically has no deductible, making it very accessible when you need it most. Insurance experts consistently recommend purchasing UMBI limits that match your liability limits — at least $100,000 per person/$300,000 per accident — since the additional premium is minimal relative to the financial protection it provides, and medical costs in a serious accident can easily exceed $100,000.

Uninsured Motorist Property Damage (UMPD)

UMPD covers repairs to your vehicle when an uninsured driver is at fault. However, it's more limited than UMBI in important ways:

• It may carry a small deductible (often around $200–$300)
• Some states do not offer UMPD, or may not extend it to hit-and-run claims
• Coverage is capped at the actual cash value of your vehicle

UMPD vs. Collision Coverage

If you already carry collision coverage on your vehicle, the role of UMPD becomes less urgent for property damage — but UMBI remains essential regardless. Here's how they compare:

If you have collision insurance, you may choose to skip UMPD for property damage — but you should still carry UMBI to protect against bodily injury losses that collision coverage doesn't touch. Learn more about hit-and-run coverage and which policies apply when a driver flees the scene.

Stacked vs. Unstacked Uninsured Motorist Coverage

In states where it's permitted, drivers with multiple vehicles have the option to stack their UM/UIM coverage. This is an important decision that can dramatically change how much protection you actually have.

What Is Stacking?

Stacking allows you to combine — or "stack" — the UM/UIM bodily injury limits from multiple vehicles on the same policy, or across multiple separate policies, to create a higher total coverage amount.

Example: If you insure two cars and each has $25,000 in UM/UIM coverage, stacking would give you a combined limit of $50,000 per accident instead of just $25,000.

There are two forms of stacking:

• Vertical (Intra-policy) stacking — Combines limits across multiple vehicles on the same policy
• Horizontal (Inter-policy) stacking — Combines limits from two or more separate policies within the same household

Stacking applies only to bodily injury coverage, not property damage. Stacked coverage typically costs 20–30% more than unstacked, but the added protection can be well worth the difference — especially for families with multiple vehicles in high-uninsured-rate states.

Notable 2025 update: North Carolina's sweeping July 2025 auto insurance overhaul reaffirmed and expanded inter-policy stacking rights, a significant win for consumers in that state.

Stacked vs. Unstacked: A Quick Comparison

For a deeper look at how stacking works across all 50 states, see our full stacked vs. unstacked insurance guide.

UM/UIM Requirements by State & Coverage Costs

States Where UM/UIM Is Required

At least 22 states plus the District of Columbia have mandatory requirements for uninsured or underinsured motorist coverage. This means insurers must include it in your policy unless you formally reject it in writing. States with mandatory UM/UIM include:

Key 2025–2026 State Law Changes

Several states have made major changes to UM/UIM laws that took effect in 2025 and 2026:

• North Carolina (July 1, 2025): Now mandates both UM and UIM coverage at $50,000/$100,000 minimums. UIM is now calculated on total damages sustained, not reduced by the at-fault driver's coverage limits (elimination of the liability setoff). Inter-policy stacking rights also reaffirmed.
• New Jersey (January 1, 2026): Raised mandatory UM/UIM minimums to $35,000 per person and $70,000 per accident to align with new liability minimums.
• Massachusetts (July 1, 2025): Raised compulsory auto insurance limits including bodily injury coverage.
• South Carolina (2025–2026): New law prohibits insurers from raising your premium solely because you filed a UM/UIM claim when you were not at fault.

Always check your state's current minimum car insurance requirements to understand what's mandatory where you live. Not sure if you're carrying enough overall? Our guide on whether you're underinsured can help you evaluate your full policy.

How Much Does UM/UIM Coverage Cost?

UM/UIM is widely considered one of the most affordable protections you can add to your auto policy. While exact costs vary by state, insurer, and your driver profile, current industry figures show:

• 3–5% of your total annual premium for combined UM/UIM coverage
• $3–$6 per month for bodily injury coverage (UMBI) in many states
• $2–$5 per month for property damage (UMPD) where available
• An estimated $50–$90 per year in combined UM/UIM premiums for many drivers

For context, this is a fraction of what you'd pay for full coverage car insurance, and the financial protection it delivers is disproportionately large compared to its cost. Higher limits (e.g., $100,000+ in UMBI) will cost more, but remain very affordable relative to the coverage provided.

Why Experts Strongly Recommend UM/UIM Coverage

Even in states where UM/UIM is entirely optional, virtually every insurance expert, financial advisor, and personal injury attorney recommends carrying it. Here's why:

The Risk Is Real and Growing

The uninsured driver rate in the U.S. has climbed steadily since 2017, rising from roughly 12% to 15.4% in 2023 — representing approximately 30 million uninsured drivers nationwide. The underinsured problem is growing even faster: UIM claim frequency has more than doubled compared to general bodily injury claim frequency in the years following the pandemic. In high-risk states like Mississippi, nearly 1 in 3 drivers you encounter could be uninsured. Uninsured drivers are also disproportionately likely to flee the scene after an accident, compounding the hit-and-run threat.

Suing an Uninsured Driver Is Rarely Worth It

If an uninsured driver hits you and you don't have UM coverage, your legal options are limited. You can sue the driver personally, but most uninsured motorists don't have significant assets — meaning a judgment in your favor may never result in actual payment. The process is time-consuming, costly, and often yields little to nothing.

It Fills Gaps That Other Coverages Can't

Health insurance may cover medical bills (with copays, deductibles, and coverage limits), but it won't pay for lost wages, pain and suffering, or vehicle damage. Liability car insurance only covers damage you cause to others — not what happens to you when someone else is at fault. UM/UIM is specifically designed to fill this gap. You may also want to consider umbrella insurance for an extra layer of liability protection on top of UM/UIM.

Hit-and-Runs Are a Real Threat

In most states, hit-and-run accidents are treated as uninsured motorist events. Without UM coverage, you have no recourse for injuries or vehicle damage if the driver flees the scene. Review our complete guide to uninsured motorist coverage to understand exactly how these scenarios are handled under your policy.

Understanding how UM/UIM fits into your broader policy is key. Check your no-fault state rules if you live in a PIP state, as these systems interact with UM/UIM coverage in unique ways. You can also use our car insurance coverage recommendations guide to build a well-rounded policy that truly protects you.

Frequently Asked Questions

Is uninsured motorist coverage the same as collision coverage?

No — they serve very different purposes. Collision coverage pays for damage to your vehicle in any crash, regardless of fault, including single-car accidents and hit-and-runs. Uninsured motorist coverage (specifically UMBI) primarily covers bodily injuries when you're hit by an uninsured or underinsured driver. UMPD covers vehicle damage from uninsured drivers but is narrower in scope than collision. If you have collision coverage, UMPD becomes less critical for property damage, but UMBI is still essential for injury protection.

Does UM/UIM coverage apply if I'm a pedestrian or cyclist?

Yes, in most cases. UM/UIM coverage typically extends to you as a policyholder even when you're outside your vehicle. If you're struck by an uninsured driver while walking, biking, or even riding in someone else's car, your own UM/UIM policy may cover your injuries. Policy terms vary, so confirm this with your insurer to understand the specifics of your coverage.

What happens if the at-fault driver has some insurance but not enough?

This is exactly what UIM (underinsured motorist) coverage is designed for. After the at-fault driver's liability coverage is exhausted, your UIM policy steps in to cover the remaining losses up to your own UIM limits. For example, if your damages total $80,000 and the at-fault driver only carried $30,000 in liability coverage, your UIM policy could potentially cover the remaining $50,000 — up to your policy's limit. Notably, states like North Carolina have eliminated the "liability setoff" as of July 2025, making UIM payouts even more favorable to policyholders.

Should I match my UM/UIM limits to my liability limits?

Most experts strongly recommend it. Your liability coverage protects others from damages you cause; your UM/UIM coverage protects you from damages others cause. If you carry $100,000/$300,000 in bodily injury liability, it makes sense to match that with $100,000/$300,000 in UMBI. Carrying minimum UM/UIM limits while having high liability limits creates an asymmetric risk for you personally — and given that nearly 1 in 5 injury accidents involves losses exceeding the at-fault driver's limits, adequate UIM coverage is more important than ever.

Will filing a UM/UIM claim raise my insurance rates?

In most states, filing a UM/UIM claim should not result in a premium surcharge because you were not at fault for the accident. In fact, South Carolina enacted a 2025–2026 law explicitly prohibiting insurers from raising premiums solely because of a not-at-fault UM/UIM claim. However, policies and state laws vary, so it's worth checking your policy language and asking your insurer directly — but fear of a rate increase should never stop you from using coverage you paid for.