Uninsured motorist and underinsured motorist coverage exist for a simple reason: not every driver on the road has enough insurance to pay for the harm they cause. If you are hit by a driver with no liability insurance, or a driver whose limits are too low, UM/UIM may help cover injuries, lost wages, and certain related losses depending on your state and policy language.
UM generally addresses covered injuries caused by a driver who has no applicable liability insurance. UIM addresses covered injury losses when the at-fault driver has liability insurance but not enough to cover those losses. Vehicle damage is a separate issue: uninsured motorist property damage (UMPD), where available, has its own rules and limits.
The Insurance Information Institute explains that uninsured motorist coverage can help pay medical bills and lost wages when an at-fault uninsured driver causes an accident, and it may also apply to covered hit-and-run situations [1]. NAIC notes that UM/UIM requirements and available options vary by state, so your state rules and declarations page matter [2].
When deciding how much protection to carry, the amount of UM/UIM protection that fits your situation can depend on your financial exposure, driving habits, budget, and state requirements.
UM Coverage
Helps when the at-fault driver has no insurance or cannot be identified in a covered hit-and-run situation.
UIM Coverage
Helps when the at-fault driver has insurance, but their liability limits are too low to cover your covered losses.
Limits Matter
Low limits may be better than none, but serious injuries can exceed minimum limits quickly.
How UM/UIM Works in Real Life
Here is a simplified example. Imagine you are injured in a crash and your covered injury-related losses add up to $90,000. The at-fault driver has $25,000 in available bodily injury liability coverage. If that insurer pays its full $25,000 limit, $65,000 in losses remains unpaid. UIM may help with some of that amount, but eligibility and the amount payable depend on your own UIM limits, state law, and policy terms.
| Example Number | What It Means | Why UIM Matters |
|---|---|---|
| Your injury-related losses: $90,000 | Medical care, lost wages, and other covered damages. | This is the total financial impact in the example. |
| At-fault driver’s limit: $25,000 | Their insurer may pay up to the policy limit. | The at-fault driver’s insurance may not be enough. |
| Potential unpaid loss: $65,000 | Illustrative amount remaining if the other insurer pays the full $25,000. | Not a guaranteed UIM payout; applicable limits, offsets, and state rules control. |
The $65,000 gap is not a promise of $65,000 in UIM benefits. Some policies or states reduce the amount available based on payments from the at-fault driver’s insurer, while others apply different rules. For example, a $50,000 UIM limit does not necessarily mean you can collect an additional $50,000 after receiving $25,000 from the other insurer. Check your policy’s limits, any offsets, and your state rules before estimating a payment.
If you do not carry UIM, or if your UIM benefits do not cover the remaining losses, you may need to rely on other applicable coverage, savings, or possible recovery from the at-fault driver. That is why understanding the limits and claim rules matters.
Step 1: Evaluate Your Driving Exposure
Your exposure to UM/UIM risk depends on how often you drive, where you drive, and how much financial risk you would face after a serious accident. The more time you spend on the road, the more valuable stronger UM/UIM limits may become.
Higher Exposure Drivers
- Daily commuters.
- Long-distance highway drivers.
- Drivers in dense urban traffic.
- Households with multiple drivers or vehicles.
- Drivers who depend on their vehicle for work.
Financial Risk Questions
- Could you cover medical bills if another driver has low limits?
- Could you miss work for weeks without financial damage?
- Do you have savings or income to protect?
- Do you support dependents?
- Would a serious crash affect your household budget long term?
Step 2: Understand State Requirements and Options
UM/UIM rules vary by state. Some states require it, some require insurers to offer it, and others allow drivers to reject it in writing. NAIC explains that in some states uninsured and underinsured motorist coverage is required, and uninsured motorist coverage can reimburse you if an uninsured or hit-and-run driver hits you [2].
NAIC cites Insurance Research Council research published in 2025 estimating that 15.4% of U.S. motorists were uninsured in 2023; rates varied substantially by state [3]. This is a historical estimate, not a current-year measurement. It shows why checking uninsured-driver protection can be worthwhile, but it cannot predict the risk of any individual trip.
| Question | Why It Matters | Where to Check |
|---|---|---|
| Is UM/UIM required in my state? | Requirements vary and may affect your available choices. | Your state insurance department or licensed agent. |
| Does UM apply to hit-and-run? | Some policies require a police report or specific documentation. | Your policy documents and claims department. |
| Is stacking allowed? | Stacking can increase available limits across vehicles or policies. | Your state law and policy language. |
| Does UMPD exist in my state? | Uninsured motorist property damage rules vary by state. | Your declarations page and state rules. |
What Is Stacking?
Stacking generally means combining UM/UIM limits across multiple vehicles or policies to increase the total available coverage after a covered loss. Whether stacking is allowed, restricted, or unavailable depends on your state and policy language.
If Stacking Is Allowed
Your available UM/UIM limit may be higher than the limit shown for one vehicle, depending on how your policy is written.
If Stacking Is Not Allowed
You may only have access to the limit shown for the covered vehicle or policy involved in the claim.
Ask Before You Buy
If you insure multiple vehicles, ask your agent whether stacking applies and how it changes your protection.
Step 3: Choose Limits Based on Real Risk
A practical way to choose UM/UIM limits is to ask what would happen if another driver caused a serious crash and had no insurance or only minimum coverage. If the answer is that your savings, income, or household stability would be at risk, higher UM/UIM limits may be worth comparing.
| UM/UIM Limit | How to Read the Limit | Practical Note |
|---|---|---|
| $25,000 / $50,000 | Up to $25,000 per covered injured person and $50,000 per covered accident, if offered. | A single covered injury can exhaust the per-person limit, even if the per-accident limit is higher. |
| $50,000 / $100,000 | Up to $50,000 per covered injured person and $100,000 per covered accident, if offered. | Compare the added premium and what the policy actually covers instead of assuming this is sufficient. |
| $100,000 / $300,000 | Up to $100,000 per covered injured person and $300,000 per covered accident, if offered. | The larger per-accident ceiling does not increase the per-person ceiling for one injured person. |
| Higher UM/UIM limits, if available | Some insurers offer additional UM/UIM limits subject to state and policy rules. | Do not assume a personal umbrella liability policy increases UM/UIM benefits; ask about specific coverage or endorsements. |
These are examples of split bodily-injury limits (per person / per accident), not recommendations for every driver. Available limits and the way UIM payments are calculated can vary by state and insurer.
Many drivers compare UM/UIM limits against their bodily injury liability limits. Because the two cover different risks, it helps to understand how protection against an uninsured driver differs from liability coverage before deciding whether matching limits makes sense for your policy.
Step 4: Compare Quotes the Right Way
UM/UIM can look inexpensive or expensive depending on the state, limits, claim trends, and insurer. The only fair way to compare is to request quotes using the same UM/UIM limits, liability limits, deductibles, vehicles, and driver information.
Pricing can change with the state, selected limits, and insurer because several factors affect the cost of UM coverage. Using the same limits and policy details when comparing different UM/UIM options also makes it easier to tell whether a lower quote actually provides comparable protection.
Compare These Items
- UM bodily injury limits.
- UIM bodily injury limits.
- UM property damage, if available.
- Hit-and-run rules.
- Stacking rules.
Avoid These Mistakes
- Assuming “full coverage” always includes UM/UIM.
- Choosing minimum limits without checking injury risk.
- Ignoring state-specific rules.
- Not reviewing limits after moving or changing vehicles.
- Comparing quotes with different limits.
Questions to Ask Before Choosing UM/UIM Limits
The fastest way to understand your real protection is to ask targeted questions while reviewing your declarations page. Do not rely only on the phrase “full coverage,” because that term is not standardized.
- Do I have UM, UIM, or both?
- Are my limits per person / per accident, or structured differently?
- Does the coverage include hit-and-run claims?
- Does my policy include uninsured motorist property damage?
- Can I stack limits across vehicles?
- How do payments from the at-fault driver’s insurer affect my UIM benefits?
- How much more would it cost to raise UM/UIM to match my liability limits?
What Happens If You Need to File a Claim?
If you need to file a claim, contact the insurance company that issued your policy. For Fred Loya Insurance policyholders, the official claims page lists 1-800-880-0472 for reporting a claim [4]. Customers insured elsewhere should use their own insurer’s claims process. Requirements can vary, particularly for hit-and-run and UM/UIM claims.
If the other driver has no insurance or not enough coverage, start by documenting the crash and notifying your insurer. These steps to take after a crash involving an uninsured driver can help you organize the information that may be needed for a claim.
Final Recommendation
UM and UIM coverage protect you from a problem you cannot fully control: another driver’s lack of insurance or inadequate limits. If your budget allows, comparing higher UM/UIM limits can be a smart move, especially if you drive often, commute on busy roads, have income to protect, or live in a state with a higher share of uninsured drivers.
Start by checking your declarations page, comparing UM/UIM and liability limits, asking whether stacking or offsets apply, and getting prices for more than one limit option. Do not assume higher limits will cost only a little: compare the actual premium difference against the additional protection provided.