Uninsured motorist coverage vs underinsured motorist coverage

Rising car insurance prices mean more people are driving uninsured, and you're more likely to get hit by someone without insurance. Here's what uninsured and underinsured motorist coverages are, how they are different, and how they can protect you.

Uninsured motorist coverage vs underinsured motorist coverage

The last thing you want when driving is for someone to crash into your car. Being rear-ended or T-boned is terrifying. It’s also expensive. You’ll almost certainly need car repairs or a new vehicle. If you’re injured, you’ll have medical bills too. Normally, the liability insurance of whoever caused the accident pays for medical bills and car repairs. 

Sometimes, though, a driver is uninsured – they don’t have car insurance. They could also be underinsured – they have a cheap insurance policy that isn’t enough to cover all the costs of the accident. These drivers can leave you holding a big bill for an accident they caused. 

Luckily, uninsured motorist coverage and underinsured motorist coverage can pick up the slack and reduce your financial hardship after an accident. Let’s look at what these two types of car insurance cover and how they can help you after an accident. 

Uninsured motorist coverage and underinsured motorist coverage 

These two car insurance coverage types often come as a package deal. Most states require you to have uninsured motorist coverage, and many require underinsured motorist coverage too. Both coverages kick in when you’re in an accident where another driver is at fault (legally liable for the accident). Here’s what they cover. 

What is uninsured motorist coverage? 

Normally, if someone causes an accident, their car insurance – specifically, their liability coverage – will pay for the injuries and damage they cause. Every U.S. state besides New Hampshire and Virginia requires drivers to have liability insurance to legally drive. Unfortunately, not everyone follows the law. One in eight drivers is uninsured. 

If an uninsured driver hits you, they don’t have insurance to pay for your accident expenses. That’s when uninsured motorist coverage comes to the rescue. Instead of suing the uninsured driver and hoping they’ll cover your expenses out of pocket, you can rely on your uninsured motorist coverage to pay for the damages. 

What is underinsured motorist coverage? 

Underinsured motorist coverage serves a similar purpose to uninsured motorist coverage. If an at-fault driver has car insurance limits too low to cover all the accident expenses, underinsured motorist coverage steps in to pay for some or all of the costs left over. 

Want more information about coverage types? Read about the difference between uninsured motorist coverage and collision comprehensive coverage, or check out our article that explains all the car insurance coverages

How uninsured and underinsured motorist coverage works 

You’re minding your own business as you drive to your friend’s house in Cambridge for a movie night. Halfway there, a driver runs a red light and hits your car at high speed. An ambulance whisks you to the hospital for emergency surgery to stop internal bleeding and fix your broken bones. You receive a huge bill from the ambulance service and the hospital. More bills are coming as you attend physical therapy for your injuries and see a therapist to heal from the trauma of the accident. Your medical expenses alone are more than $100,000. 

Let’s break down this scenario: 

  • Medical expenses: $100,000 
  • Other driver’s insurance: $20,000 (she has the minimum liability coverage for Massachusetts) 
  • Your insurance (MedPay and personal injury protection (PIP) coverage): $10,000 
  • Your remaining out-of-pocket cost: $70,000 

If you have uninsured/underinsured motorist bodily injury coverage (UMBI/UIMBI) that coverage will kick in to help cover the rest of your medical expenses. Your collision coverage handles the cost of replacing your car, and your uninsured/underinsured motorist property damage coverage (UMPD/UIMPD) covers your collision coverage deductible and the car you rented while waiting for your new car. Now you can focus on the hard work of healing from the accident, instead of worrying about going into debt. 

If the driver was uninsured, your UMBI would work the same way – you just wouldn’t file a claim with her insurer (since she doesn’t have one). 

Should I have uninsured or underinsured coverage on my car insurance policy? 

Yes! It’s important to have insurance that covers accidents with uninsured and underinsured drivers. If you live in a state with no liability insurance requirements or one where the requirements have low limits, it’s doubly important. You should set your UMBI/UIMBI limits to the same limits as your bodily injury coverage. 

Need help choosing uninsured and underinsured coverage limits or getting a quote for a policy with all the right coverages for your situation? Contact one of Surround Insurance’s independent agents – we’re car insurance experts and we’re happy to help.

This is general information based on questions our customers ask us. It may not be right for your specific situation. You should get some advice from a licensed insurance agent (like us!) before you make a decision on your own insurance.