Underinsured Motorist Coverage
Underinsured motorist (UIM) coverage steps in when the driver who caused the accident has insurance, but not enough to fully compensate you for your injuries and damages.
Definition maintained by the InsurTool Editorial Team. Last reviewed .
Core Takeaways
- Underinsured motorist (UIM) coverage pays when the at-fault driver has insufficient insurance to cover your damages.
- UIM is different from uninsured motorist (UM) coverage, which applies when the other driver has no insurance at all.
- Many drivers carry only minimum liability limits, making UIM a critical protection.
- UIM coverage is required in some states but optional in others.
What is Underinsured Motorist Coverage?
In plain English: If someone hits you and their insurance only covers $25,000, but your medical bills are $100,000, your UIM coverage pays the $75,000 difference (up to your UIM limit).
How Underinsured Motorist Coverage Works
UIM coverage fills the gap between the at-fault driver’s liability limits and your actual damages. Here’s how it works:
- The at-fault driver’s insurance pays up to their liability limits
- Your UIM coverage pays the remaining amount, up to your UIM limits
- You must first exhaust the other driver’s insurance before making a UIM claim
| Scenario | At-Fault Driver’s Liability Limits | Your Actual Damages | Your UIM Coverage | UIM Payout |
|---|---|---|---|---|
| Minor injury | $25,000 | $15,000 | $50,000 | $0 (other driver covers it) |
| Serious injury | $25,000 | $75,000 | $100,000 | $50,000 |
| Catastrophic injury | $50,000 | $300,000 | $250,000 | $250,000 |
Underinsured vs. Uninsured Motorist Coverage
These two coverages are often bundled together but serve different purposes:
- Uninsured Motorist (UM): Applies when the at-fault driver has NO insurance
- Underinsured Motorist (UIM): Applies when the at-fault driver has insurance but NOT ENOUGH
Important: I used our auto insurance calculator to compare policies with and without UIM coverage, and the difference in premium is surprisingly small—usually just $10-$20 a month for $100,000 in UIM coverage. It’s one of those coverages you hope you never need, but you’ll be glad you have it if you do.
Common Misconceptions
- Myth — If someone hits me, their insurance will cover everything
- Fact — 41 million drivers have no insurance, and many more carry only minimum limits
- Myth — Health insurance covers accident injuries
- Fact — Health insurance may cover medical bills but not lost wages or pain and suffering
Authoritative Sources
For more information on underinsured motorist coverage, visit these trusted resources:
- Insurance Information Institute (III)
- National Association of Insurance Commissioners (NAIC)
- DMV.org
Frequently Asked Questions
Is underinsured motorist coverage required?
It depends on the state. Some states require UIM coverage, while others make it optional. Check your state’s requirements or talk to your agent.
How much UIM coverage do I need?
Most experts recommend UIM limits equal to your bodily injury liability limits. If you have $100,000/$300,000 liability, you should have the same UIM limits.
Does UIM cover property damage?
Some policies include underinsured motorist property damage (UMPD), but it’s separate from UIM bodily injury coverage. Check your policy to see if you have UMPD.
Can I stack UIM coverage?
Stacking allows you to combine UIM limits from multiple vehicles on your policy. Some states allow stacking, others don’t. It can significantly increase your coverage.
About this definition
Written and checked against the primary sources linked on this page by the InsurTool Editorial Team. Definitions describe how these terms are used in the United States; policy wording differs between insurers, and state law changes the meaning of some terms. Your own policy document is the authority for your coverage.
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