Underinsured Motorist Coverage (UIM)
Underinsured motorist coverage (UIM) is an auto insurance endorsement that protects you when an at-fault driver’s liability limits are too low to cover your medical bills or vehicle damage. If the other driver’s policy doesn’t fully pay your losses, your UIM policy can cover the remainder, up to your policy limits.
How UIM works
- After an accident caused by another driver, you pursue the at-fault driver’s liability insurer first.
- If that insurer’s limits are insufficient to cover your injury-related expenses or vehicle repair/replacement, your UIM coverage may pay the shortfall (subject to your limits).
- Coverage typically has two components:
- UIM bodily injury — medical bills, and sometimes lost wages and pain and suffering.
- UIM property damage — repair or replacement costs for your vehicle.
- In some states only bodily injury UIM is available.
Example: The at-fault driver’s liability limit is $25,000 but your medical and repair costs total $60,000. If you have UIM with $50,000 limits, your insurer may pay up to an additional $35,000 (after the other driver’s $25,000), not exceeding your UIM limit.
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Note: You cannot recover more than the actual losses you incurred.
Benefits and common features
- Fills gaps when another driver’s insurance is inadequate.
- Can reduce out-of-pocket costs for medical care, lost wages, and vehicle repairs.
- Some insurers and states allow “stacking” of UIM limits across multiple vehicles or policies, which can increase the total available coverage (for example, two $35,000 limits stacked = $70,000). Stacking rules vary by state and policy.
Where UIM is required
Some states require UIM coverage, while others make it optional. States that require UIM include:
– Connecticut, Kansas, Maine, Maryland, Minnesota, Nebraska, North Carolina, North Dakota, Oregon, South Dakota, Vermont.
Additional notes:
– New Hampshire and Virginia: UIM applies if you choose to carry insurance (Virginia also allows opting out with a fee).
– Rhode Island: UIM requirement applies if you purchase liability above the state minimum.
– Illinois: UIM is required if you buy UM limits higher than the state minimum.
– New Jersey: UIM is required with a standard policy but not with a basic policy.
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Check your state laws and your policy details, since requirements and availability differ.
Hit-and-run and uninsured drivers
- UIM covers situations where the at-fault driver has insufficient insurance.
- Hit-and-run incidents involve unidentified drivers and are generally handled under uninsured motorist (UM) coverage, not UIM. In some cases you may also need collision coverage to recover vehicle damage from a hit-and-run — confirm with your insurer.
When to consider UIM
- You live or drive in states with low minimum liability limits.
- You want added protection against severe injuries or expensive damage.
- You have multiple insured vehicles and want the option to stack limits (if allowed).
Key takeaways
- UIM protects you when an at-fault driver’s insurance is not enough to cover your costs.
- Coverage may include bodily injury and property damage, though only bodily injury is available in some jurisdictions.
- Some states require UIM; rules and stacking options vary by state and insurer.
- For hit-and-run incidents, uninsured motorist (UM) or collision coverage is typically used instead of UIM.
If you’re unsure what your policy covers or what your state requires, consult your insurance agent or your state’s motor vehicle/insurance department.