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Uninsured and Underinsured Motorist Coverage 101

Updated: December 2016

Drivers in most states are legally required to carry auto liability insurance coverage. However, one in eight drivers on U.S. roads is uninsured, according to the Insurance Information Institute (III). And being in an accident with just one of them could put you at financial risk.

Man and woman making calls after car crash.

Uninsured Motorist Coverage: Why You Need It

Typically, when you're in an accident and the other driver is at fault, his or her liability coverage would help pay for your medical bills or damage to your car. But if the at-fault driver doesn't have car insurance, you may have to pay out of your own pocket for your medical bills or damage to your car.

That's where uninsured motorist coverage comes in: It may help pay for resulting costs, up to your coverage limits, when you're hit by a driver who doesn't have car insurance.

Is uninsured motorist coverage required? Depending on where you live, uninsured motorist coverage may be required by law: 20 states and the District of Columbia have laws that make it mandatory, according to the III.

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Underinsured Motorist Coverage: A Related Protection

There's also a related protection called underinsured motorist coverage. You may find that, in some states, uninsured and underinsured motorist coverage are bundled together and offered as a single protection on your car insurance policy.

So, what does it mean to be "underinsured"? It depends on where you live. Each state defines "underinsured" a bit differently. An underinsured driver has liability insurance but either:

  • Their liability limits aren't enough to cover your bills after an accident


  • Their liability limits are less than or equal to your underinsured mostorist coverage limit

Is underinsured motorist coverage required? Underinsured motorist coverage is an optional protection in most states — just five (Connecticut, Maine, Minnesota, North Carolina, and Vermont) make it a legal requirement, says the III.

What Do Uninsured and Underinsured Motorist Typically Cover?

Uninsured and underinsured motorist coverage may offer two types of protection:

  • Bodily injury may help cover costs related to your injuries that result from a crash caused by an uninsured or underinsured driver. In some states this protection may extend to a family member who is driving your car, or your passengers.
  • Property damage may help cover repairs to your vehicle after a crash caused by an uninsured or underinsured driver. This protection is not available in all states.

It's important to understand how uninsured and underinsured motorist coverage works where you live. Then, you can choose coverage limits that would work for you in case of an accident.

Need help understanding your state's requirements? Talk to a local agent about uninsured and underinsured motorist coverage.

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