Uninsured/Underinsured Motorist (UM/UIM) coverage protects you when the person who caused your accident either has no insurance at all or doesn't have enough to cover your injuries. It steps into the shoes of the at-fault driver's missing coverage, so you aren't left paying for someone else's mistake. It's part of your own auto policy, even though it responds to another driver's fault.

UM vs. UIM

• Uninsured Motorist (UM) applies when the at-fault driver has no liability insurance. The ISO Personal Auto Policy (PP 00 01 09 18, Part C) also treats as uninsured a vehicle insured below the state's financial responsibility minimum, a hit-and-run vehicle whose owner or operator can't be identified, and one whose insurer denies coverage or becomes insolvent. Vehicles owned by or furnished for the regular use of you or a family member, and government-owned vehicles, are not uninsured motor vehicles.
• Underinsured Motorist (UIM) applies when the at-fault driver has insurance, but their limits are too low to cover all your damages. Your UIM coverage helps fill the gap.

Part C pays compensatory damages you are legally entitled to recover from the uninsured driver because of bodily injury, so the other driver must be at fault; punitive damages are not paid. After a hit-and-run you must notify the police promptly. Arbitration happens only if both you and the insurer agree. Whether UM and UIM must be carried, offered or may be rejected, how UIM is triggered, and whether UM covers property damage are all set by state law.

Why it matters

Plenty of drivers on the road carry minimal coverage or none at all. Without UM/UIM, a serious injury caused by one of them could leave you with medical bills and lost wages and no one able to pay them. UM/UIM turns your own policy into a safety net.

A simple example

A driver with no insurance runs a red light and totals your car, injuring your back. Because the at-fault driver can't pay, your Uninsured Motorist coverage pays for your injuries as if it were the at-fault driver's liability policy—up to your UM limit.

Don't confuse it with…

UM/UIM is first-party coverage on your policy that pays you, even though the loss was someone else's fault—a slightly unusual combination. It's different from collision coverage (which repairs your car regardless of fault) and from liability coverage (which pays others when you're at fault).

On the exam

Remember the trigger words: UM = no insurance, UIM = not enough insurance. Know that hit-and-run is often treated under UM, and that this coverage protects you against the other driver's failure to carry adequate insurance.