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Uninsured vs Underinsured Motorist Coverage: UM vs UIM Explained

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Key takeaways

  • Uninsured motorist (UM) coverage pays when the at-fault driver has no insurance, or in a hit-and-run. Underinsured motorist (UIM) coverage pays when the at-fault driver's limits are too low to cover your loss.
  • According to the Insurance Research Council, cited by Triple-I, 15.4 percent of motorists were uninsured in 2023.
  • Triple-I says 20 states and D.C. require UM or UIM. In Pennsylvania, stacked coverage applies by law unless you reject it.

This guide is part of our car insurance coverage explained section. If you are still deciding whether to carry UM at all, start with is uninsured motorist coverage worth it.

What is the difference between UM and UIM?

Both pay you, not the other driver, when someone else causes the crash and cannot pay for the harm. The difference is why they cannot pay.

The NAIC's shopping guide defines three coverages:

UMUIM
At-fault driver's insuranceNoneSome, but not enough
Hit-and-runCoveredNot the trigger; hit-and-run falls under UM
Pays forYour and your passengers' injuries; car damage where UM property damage is soldYour and your passengers' injuries above the other driver's limits
When it starts payingRight away, since there is no other insurerAfter the other driver's liability limits are used up, subject to your state's rules

Triple-I adds that the coverage also applies "if, as a pedestrian, you are struck by an uninsured or underinsured motorist."

Flow chart: does UM or UIM pay after an at-fault driver hits you? At-fault driver hits you Can the driver be identified? No Yes Hit-and-run: UM pays Do they have insurance? No Yes UM pays Their liability pays first. If it runs out, UIM pays the rest
Simplified flow based on NAIC coverage definitions. How "underinsured" is defined, and how UIM is calculated, depends on your state law and policy.

How does underinsured motorist coverage work in a real crash?

Take a crash in Ohio, where the Ohio BMV lists the minimum as $25,000 per injured person. The at-fault driver carries only that minimum. Your medical bills and lost income come to $80,000, an illustrative figure.

  1. The at-fault driver's bodily injury liability pays up to its $25,000 per-person limit.
  2. That leaves $55,000 unpaid.
  3. Your UIM can then pay toward the remaining $55,000, up to your UIM limit and subject to how your state and policy define "underinsured."

Without UIM, your options for the $55,000 are your own health insurance, your PIP or MedPay if you carry them, or suing the other driver personally. The Texas Department of Insurance notes that your health plan "won't cover long-term care needs or help if you aren't able to work."

For how your own medical coverages fit in, see MedPay vs PIP.

What does UM/UIM pay for that health insurance does not?

The Texas Department of Insurance lists what uninsured/underinsured coverage pays for in Texas:

It also notes that in Texas the deductible for uninsured/underinsured coverage is $250, and "the deductible if you use your collision is likely much higher." Coverage and deductibles differ by state, so check your policy.

What is stacked uninsured motorist coverage?

Stacking lets you add together UM or UIM limits across vehicles or policies. The Pennsylvania Insurance Department's guide explains that when you stack, "your limit of coverage for each covered vehicle on your policy is multiplied by the number of vehicles on the policy," and that you can also receive coverage "from more than one policy under which you are insured."

Example. You have $25,000 of UIM on each of three cars on one Pennsylvania policy. Stacked, your UIM limit is $25,000 x 3 = $75,000. Unstacked, it is $25,000.

In Pennsylvania, "by law, stacked coverage applies unless you reject it," and the department notes "you will pay less in premiums if you reject stacked coverage." Rules on stacking vary widely by state and policy. Ask your insurer whether stacking is available where you live and what it costs.

Rejecting UM is a paperwork decision, not a default. In Texas, insurers must offer UM coverage, and "if you don't want it, you have to turn it down in writing," per the Texas Department of Insurance. In Pennsylvania, stacking stays on unless you reject it. If you never signed anything, check your declarations page before assuming you have or lack the coverage.

Which states require UM or UIM coverage?

Triple-I says "Twenty states and the District of Columbia have mandatory requirements for uninsured or underinsured motorist coverage." Its state table, compiled from the American Property Casualty Insurers Association and state insurance departments, lists these as requiring UM, UIM or both:

Requires UM and UIM (per Triple-I table)Requires UM (per Triple-I table)
Connecticut, Illinois, Maine, Maryland, Minnesota, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oregon, South Dakota, Vermont, VirginiaD.C., Missouri, South Carolina, West Virginia, Wisconsin

Triple-I's own note on the table: "State laws regarding mandatory requirements for uninsured and underinsured motorists vary. State departments of insurance should be consulted to determine whether these coverages are compulsory." The table and the headline count do not match exactly, so treat this as a starting point and confirm with your state. Our state minimums hub tracks each state's requirements.

Some states, such as Texas, require insurers to offer it even though you can decline it.

How much UM/UIM should you carry?

Start from what an injury would cost you if the other driver could not pay: medical bills, lost income and a damaged car. The Texas Department of Insurance suggests adding "at least enough property damage coverage to replace your vehicle" and notes that in Texas you can usually add more in $5,000 increments.

Your state's uninsured rate matters too. In 2023, Triple-I's state table shows rates from 5.7 percent in Maine to 28.2 percent in Mississippi.

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FAQ

Do I need both uninsured and underinsured motorist coverage? They cover different situations. UM protects you from drivers with no insurance and hit-and-runs. UIM protects you from drivers whose limits are too low. In Texas, for example, they are offered as one coverage, uninsured/underinsured motorist.

Does UM cover a hit-and-run? Yes. The NAIC's definitions of both UM bodily injury and UM property damage include hit-and-run drivers. In Texas, the Department of Insurance says UM will not pay for a hit-and-run you did not report to police.

Can I stack UM coverage in every state? No. Stacking rules vary by state and policy. In Pennsylvania it applies by law unless you reject it.

Does UIM pay if the other driver has state minimum coverage? It can, once their limits are used up, if your loss is larger. How UIM is calculated depends on your state's definition of underinsured.

Does UM cover me as a pedestrian? Triple-I says it applies if, as a pedestrian, you are struck by an uninsured or underinsured motorist.

Sources

This article is general information, not insurance or legal advice. UM/UIM rules, stacking and offsets vary by state and policy.