What’s the Difference Between Uninsured and Underinsured Motorist Coverage?

Last Updated on February 5, 2026

You’re driving the speed limit and minding your own business when—out of nowhere—you get rear-ended or T-boned. Even a “minor” crash can turn into a big headache. At least, you think, the at-fault driver’s insurance will pay for the damage and medical bills.

Then you find out the worst-case scenario: the driver who hit you isn’t insured—or they have insurance, but their limits aren’t high enough to cover what you’re owed. That’s where uninsured motorist (UM) and underinsured motorist (UIM) coverage come in.

They sound similar, but they solve two different problems. Below is what UM and UIM cover, how they differ, and how to pick limits that actually protect you.

• Uninsured motorist (UM) helps when the at-fault driver has no insurance (and often in hit-and-run situations, depending on your state and policy).
• Underinsured motorist (UIM) helps when the at-fault driver has insurance, but their liability limits aren’t high enough to cover your injuries or damage.
• UM/UIM is commonly split into bodily injury (UMBI/UIMBI) and property damage (UMPD), and the property-damage rules vary widely by state.
• Even if UM/UIM isn’t required in your state, it’s often worth pricing out because it protects you from other drivers carrying no insurance or only minimum limits.

Why UM/UIM Coverage Matters

Even though most drivers are legally required to carry car insurance, not everyone does—and the share of uninsured drivers has increased in recent years. On top of that, plenty of insured drivers carry only the minimum limits required by law, which often isn’t enough for a serious crash.

Translation: if someone hits you and doesn’t have insurance or doesn’t have enough coverage, you could end up paying the difference yourself—even when you did nothing wrong.

UM and UIM are designed to protect you from that financial hit. If you want a deeper “do I actually need this?” breakdown, start here: uninsured and/or underinsured motorist coverage.

What Is Uninsured Motorist (UM) Coverage?

Uninsured motorist (UM) helps pay for your injuries (and in some states, property damage) when the driver who caused the crash:

• Has no auto insurance, or
• Can’t be identified (this commonly comes up in hit-and-run situations, depending on your state and policy).

Since uninsured drivers often have limited ability to pay out-of-pocket, UM coverage can be the difference between getting your bills paid and being stuck chasing money you may never collect.

If you’re curious how the uninsured rate looks where you live, see: uninsured motorists by state.

What Is Underinsured Motorist (UIM) Coverage?

Underinsured motorist (UIM) kicks in when the at-fault driver does have insurance—but their liability limits aren’t high enough to cover your losses. This is especially common in states with low minimum requirements.

Example: you have $60,000 in medical bills and lost wages. The at-fault driver carries the state minimum coverage and their insurer can only pay $25,000. UIM helps cover the remaining eligible amount (up to your UIM limits and your state’s rules).

So what’s the difference between UM and UIM?

The difference is simple:

• UM applies when the at-fault driver has no insurance (or can’t be found/identified in some cases).
• UIM applies when the at-fault driver has insurance, but not enough to fully pay what you’re owed.

In both cases, you’re using your own policy to protect yourself from someone else’s lack of coverage.

UM/UIM Bodily Injury vs. Property Damage

UM/UIM coverage is often split into two buckets—similar to how liability coverage is split:

• Bodily injury (injuries to people)
• Property damage (damage to vehicles/property)

UM/UIM Bodily Injury (UMBI/UIMBI)

UMBI (and the underinsured version, usually labeled UIMBI) can help cover costs like:

• Medical bills (and sometimes gaps your health insurance doesn’t cover)
• Rehab expenses
• Lost wages due to crash-related injuries

It’s meant to protect you and your household—not other drivers. That’s the job of your bodily injury liability coverage.

UM Property Damage (UMPD)

UMPD can help pay for vehicle/property damage when the at-fault driver is uninsured. State rules vary a lot here: some states cap UMPD, some apply a deductible, and some won’t let you buy UMPD if you already carry collision coverage.

UMPD is different from your property damage liability coverage, which pays for damage you cause to others.

Does UM/UIM Cover Hit-and-Run Accidents?

Often, yes—UM coverage commonly applies when the at-fault driver can’t be identified (a classic hit-and-run). But the details depend on your state and policy language, and some insurers require you to report the crash promptly and cooperate with the investigation.

How UM/UIM Works With MedPay, PIP, and Collision

UM/UIM isn’t a replacement for every other coverage on your policy:

• Collision typically pays to repair your car after a crash (regardless of who’s at fault), while UMPD only applies in specific uninsured-driver situations.
• MedPay/PIP can pay medical bills regardless of fault, while UM/UIM usually focuses on injuries caused by an uninsured/underinsured driver. (Related reading: medical payments coverage.)

If you have multiple coverages that could apply, your insurer will follow your state’s “order of benefits” rules to decide what pays first and whether any offsets apply.

Is Uninsured/Underinsured Motorist Coverage Required?

It depends on your state. In some states, UM and/or UIM is mandatory. In many others, insurers must offer it and you can reject it in writing. Because the rules (and minimum limits) vary, it’s best to check your state’s insurance department or ask your agent to confirm what’s required where you live.

FAQs on Uninsured vs. Underinsured Motorist Coverage

Is UM/UIM Worth It If It’s Optional?

For many drivers, yes. UM/UIM can be one of the highest “value per dollar” protections on an auto policy because it shields you from a problem you can’t control: other drivers carrying no insurance or low limits. And while you can sometimes recover money by suing an uninsured driver, collecting is often the hard part.

The best approach is to price it both ways. Ask your insurer for quotes with and without UM/UIM (and with higher vs. lower limits). In many cases, a meaningful amount of protection costs far less than people expect.