Uninsured and Underinsured Motorist Coverage Explained

Quick answer

Uninsured motorist (UM) coverage on your own auto policy can apply if you are hit by an uninsured or hit-and-run driver, and underinsured motorist (UIM) coverage can apply if the at-fault driver's limits are too low. The NAIC explains that the definition of underinsured depends on state law or your policy. Check your declarations page, notify your insurer promptly, and watch policy conditions and time limits.

• UM and UIM are first-party coverages. You claim under your own policy, and its terms and your state's law decide what is covered.
• What counts as underinsured depends on state law or the policy, and different states use different tests.
• Many policies require prompt notice, and some require a police report for hit-and-run claims or the insurer's consent before you settle with the at-fault driver.
• Time limits for UM/UIM claims can be set by statute or by the policy, so identify them early.

The gap this coverage fills

Most drivers assume that if another driver causes a crash, that driver's insurance will pay for the damage. Sometimes it does not. The other driver may have no insurance, may have insurance that does not apply or may have only the minimum coverage the state requires, which may be far less than the cost of a serious injury. In a hit-and-run, the driver may never be found.

Uninsured motorist (UM) and underinsured motorist (UIM) coverages exist to address this gap. They are part of your own auto policy, and they allow you to claim from your own insurer when the at-fault driver cannot or does not fully pay. Because you are claiming under your own policy, these are first-party claims, governed by your policy's terms and your state's law.

This guide explains what these coverages generally do, how states differ, how a claim typically works and what to check in your policy. Details vary widely by state and by policy. It cannot tell you whether you have coverage or how a claim would be decided. It is general information, not legal advice.

The basic coverages

The National Association of Insurance Commissioners (NAIC) publishes an auto insurance shopping tool that describes these coverages in plain language.

• Uninsured motorist bodily injury (UM or UMBI) pays for your bodily injuries and those of your passengers if you are hit by a hit-and-run driver or an uninsured driver who is at fault.
• Uninsured motorist property damage (UMPD) pays for damage to your car if you are hit by a hit-and-run driver or an uninsured driver who is at fault. It is not available or structured the same way in every state.
• Underinsured motorist coverage (UIM) pays for your bodily injuries and those of your passengers if you are hit by an underinsured driver who is at fault. The NAIC explains that "underinsured" will be defined by your state law or by your insurance policy, which means this coverage can vary by state or by insurance policy.

The NAIC also notes that minimum coverage amounts differ in each state, and suggests checking with the state department of motor vehicles or department of insurance to learn what your state requires. The NAIC's tool also points out that rates are higher for higher limits on these coverages.

Some states combine UM and UIM into one coverage, some treat them separately, and some use different terms. Some policies also include medical payments or personal injury protection, which work alongside these coverages.

How states differ

UM and UIM rules vary by state in several ways that matter.

• Required, offered or optional. Some states require drivers to carry UM or UIM coverage. Others require insurers to offer it but let the driver reject it, often in writing. Others leave it entirely optional. If you rejected coverage in writing in the past, that choice may still apply.
• Limits. In some states, UM/UIM limits must match your liability limits unless you choose lower ones, while other states allow independent choices.
• The definition of underinsured. States use different approaches. In some, a driver is underinsured if their liability limits are lower than your UIM limits. In others, a driver is underinsured if their limits are lower than your total damages. These tests can produce very different results, and UIM payments may be calculated as an "add-on" to the at-fault driver's limits or as a "difference in limits."
• Stacking. Stacking means combining limits from multiple vehicles or policies. Some states allow it, some restrict it and some policies prohibit it, within the limits of state law.
• Hit-and-run and unidentified vehicles. Some policies or states require physical contact between the vehicles, or a police report within a set period, for claims involving unidentified drivers.
• Property damage. Whether UM coverage pays for vehicle damage, and what deductible applies, differs by state.

Because these variables interact, two drivers in similar crashes can receive very different outcomes in different states. The declarations page and the policy's UM/UIM endorsement are the starting point. Your state insurance department can explain your state's rules, and the NAIC directs consumers to state departments through its consumer site.

How a UM or UIM claim works

A UM or UIM claim is a claim under your own policy, and it follows the pattern of first-party claims described in our overview of how insurance and injury claims work.

1. Report the crash and notify your insurer promptly. Policies commonly require timely notice of a loss and notice that you may make a UM or UIM claim. Ask the insurer what it requires.
2. Identify the other driver's insurance. For UIM, you need to know the at-fault driver's liability limits. You can ask the at-fault driver's insurer for a written statement of policy limits, and insurers sometimes disclose them on request or with the driver's consent, under rules that differ by state.
3. Document your injuries and losses. Medical records, bills, proof of missed work and photographs are central. Our guide to how to document a claim explains how to organize them.
4. Make the claim and cooperate. Your insurer may ask for statements, records authorizations and medical examinations, as your policy provides.
5. Evaluation and negotiation. Your insurer evaluates your claim, including fault and damages, and may make an offer. You can negotiate, and our guide to evaluating a settlement offer explains the questions to ask.
6. Dispute resolution. If you and your insurer disagree, many policies provide for arbitration or appraisal of UM/UIM claims, while others permit a lawsuit. The policy's dispute resolution clause and state law determine which applies.

Even though this is your own insurer, the claim can be adversarial. The insurer will evaluate whether the other driver was at fault, what your damages are and whether policy conditions were met, and it may dispute any of these. Stick to facts, keep records and respond to information requests promptly.

The UIM sequence and policy conditions

UIM claims often involve two steps: a claim against the at-fault driver's liability coverage, and then a claim against your UIM coverage for any remaining losses. Policy conditions can affect this sequence, so read them carefully.

• Exhaustion. Some policies or states require you to recover the at-fault driver's liability limits before a UIM claim can proceed.
• Consent to settle. Many UIM provisions require you to notify your insurer, or obtain its consent, before settling with the at-fault driver and releasing that driver, because a release can affect the insurer's rights to recover from the at-fault driver. Failing to follow the required procedure can jeopardize UIM benefits in some states.
• Notice of a proposed settlement. Some states have procedures for notifying the UIM insurer of a settlement offer and giving it a short period to respond.
• Offsets and credits. Some policies reduce UM/UIM benefits by amounts paid from other sources, such as liability payments or medical payments coverage, and rules about offsets differ by state.

Before you sign any release with the at-fault driver or insurer, ask your insurer in writing how that release will affect your UIM rights, and keep the response. A licensed attorney can advise on how your state handles these rules.

Time limits and notice

UM and UIM claims are often subject to time limits that differ from those that apply to claims against the at-fault driver. Depending on the state, the time limit may be set by a statute of limitations for contract claims, by a specific UM/UIM statute or by a clause in the policy, and the clock may start on the date of the crash, the date of a denial, the date of settlement with the at-fault driver or another date. Some states treat these differently for arbitration demands than for lawsuits.

For that reason, it is unsafe to assume that the same deadline applies as for an injury claim against the other driver. Find the UM/UIM language in your policy, check your state's rules and calendar the earliest possible deadline. Our explainer on statutes of limitation and claim deadlines explains how contract, policy and statutory time limits interact.

How this coverage interacts with other coverages

After a crash, several coverages may be in play.

• Health insurance may pay for medical treatment first, and may seek reimbursement from a recovery. See our guide on medical bills, liens and injury settlements.
• Medical payments or PIP coverage may pay some medical expenses regardless of fault, within limits.
• Collision coverage may pay for vehicle damage regardless of fault, subject to your deductible, and is sometimes a faster route than UM property damage.
• Liability coverage of the at-fault driver, if any, is usually the first source for injury claims.

Coordination rules differ by state and policy. Ask your insurer which coverage it is applying to each loss and how offsets work, and keep the answers in writing.

How to check your own policy

The best time to learn what you have is before a crash.

1. Find the declarations page and look for UM, UIM and UMPD listings, with limits and any deductibles.
2. Check whether you rejected coverage or chose limits lower than your liability limits, and look for a signed selection or rejection form if your state uses one.
3. Read the UM/UIM endorsement for definitions of "uninsured" and "underinsured," conditions, notice requirements, arbitration provisions and exclusions.
4. Note whether stacking applies.
5. Consider whether your limits are adequate for your circumstances. Higher UM/UIM limits cost more, as the NAIC notes, but the coverage only helps as much as its limits allow.
6. Ask your agent or insurer questions in writing, and keep the answers.

Our guide on how to read an insurance policy explains how to read limits, exclusions and conditions.

Questions to ask your insurer or agent

If you are reviewing coverage before a loss, or trying to understand a claim after one, these questions help surface the details that matter. Ask them in writing and keep the answers.

1. Do I have uninsured motorist coverage, underinsured motorist coverage or both, and what are the limits for bodily injury?
2. Is there uninsured motorist property damage coverage, and what deductible applies?
3. Did I select or reject UM or UIM coverage in writing, and can I see the form?
4. How does my policy define "underinsured," and how is the benefit calculated if the at-fault driver has insurance?
5. Can limits be stacked across vehicles or policies in my state and under my policy?
6. What must I do to report a hit-and-run or an unidentified vehicle, and within what period?
7. Do I need my insurer's consent before settling with the at-fault driver or releasing that driver?
8. How do payments from medical payments coverage, health insurance or the at-fault driver's insurer affect my UM or UIM benefits?
9. Does the policy require arbitration of UM or UIM disputes, and how does it work?
10. What time limits apply to a UM or UIM claim, and when do they start?

A licensed agent or your state insurance department can often explain how these terms work in your state, and the answers give you a baseline for deciding whether your limits fit your needs.

Example scenario (hypothetical)

A driver is hit by a car that leaves the scene. She calls the police, reports the crash and photographs her vehicle and the intersection. She notifies her insurer the same day, says she may make an uninsured motorist claim and asks what documentation is required. She keeps medical records and bills and notes the police report number.

In a different scenario, the at-fault driver is identified and insured, but the driver's liability limit is low compared with her medical costs. Before accepting the driver's insurer's payment, she writes to her own insurer to ask how the UIM provisions work, and whether consent to settle is required. She keeps the answer, checks the deadlines in her policy and state, and asks a licensed attorney how her state defines underinsured. The examples do not predict any outcome. They illustrate how notice, records and careful sequencing protect options.

Common mistakes

• Not knowing your coverage until after a crash.
• Waiting to notify your insurer of a hit-and-run or uninsured crash.
• Settling with the at-fault driver and signing a release before checking UIM requirements.
• Assuming the injury-claim deadline applies to a UM/UIM claim.
• Overlooking arbitration clauses in the UM/UIM endorsement.
• Assuming a rejection of coverage made years ago does not matter.
• Not documenting injuries and losses thoroughly.
• Ignoring requests for information or medical examinations under the policy.
• Assuming the rules are the same in every state.

A checklist

1. Call emergency services if needed, and report the crash to the police.
2. Get medical care, and keep records.
3. Identify the at-fault driver's insurance, or note that the driver is unidentified.
4. Notify your insurer promptly, including that you may make a UM or UIM claim.
5. Read your declarations page and UM/UIM endorsement.
6. Ask for the at-fault driver's policy limits in writing.
7. Do not sign a release with the at-fault driver before checking UIM requirements.
8. Identify the policy and legal deadlines, and calendar the earliest.
9. Keep a contact log, documents and proof of delivery.
10. Consider a consultation with a licensed attorney.

When legal help may be appropriate

Consider consulting a licensed attorney in your state if your injuries are serious, if the at-fault driver's limits are low, if your insurer disputes your claim, if there is an arbitration clause you do not understand, if a hit-and-run is involved or if you are close to a deadline. If you believe your insurer is handling your claim unfairly, the NAIC explains how to reach your state insurance department. USA.gov lists free and low-cost legal help programs. See our guides on after a car accident and personal injury claims for the wider picture.

Frequently asked questions

Is uninsured motorist coverage required?

It depends on the state. Some states require it, some require insurers to offer it, allowing you to reject it in writing, and others leave it optional. Your declarations page and your state insurance department can tell you what applies to you.

What is stacking?

Stacking refers to combining the UM or UIM limits from more than one vehicle or policy to increase the total available. Whether it is allowed, and how, depends on state law and policy wording, so check both.

Do I have to tell my insurer before I settle with the at-fault driver's insurer?

Many UIM provisions require notice or consent before you settle with the at-fault driver, and failing to follow them can affect your rights. Read your policy's conditions and ask your insurer before signing any release.

When to consult a licensed attorney

This article is general information. It cannot account for the facts of your situation, the wording of your policy or contract, or the law where you live. Consider speaking with an appropriately licensed attorney in your jurisdiction if any of the following applies:

• A deadline may be running, or you are unsure whether one applies.
• You have been seriously injured, or a large amount of money or property is involved.
• You have been asked to sign a release, waiver or settlement agreement.
• A claim has been denied and you do not understand why, or you believe you are being treated unfairly.

Legal aid organizations, bar association referral services and court self-help centers may offer free or low-cost help. See our guide to finding and vetting a licensed attorney.

Important legal notice

Verdicairn is an independent informational publication, not a law firm. Content is general educational information, not legal advice, and reading it does not create an attorney-client relationship. Laws vary by jurisdiction and change over time, so information may be out of date. For advice about your situation, consult an appropriately licensed attorney. Read the full disclaimer.

Sources and further reading

1. NAIC Consumer Shopping Tool for Auto Insurance — National Association of Insurance Commissioners. Accessed September 29, 2026
2. How to File a Complaint and Research Complaints Against Insurance Carriers — NAIC. Accessed September 29, 2026
3. Consumer resources — NAIC. Accessed September 29, 2026
4. Find a lawyer for affordable legal aid — USA.gov. Accessed September 29, 2026

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