A person sitting on the road and speaking on the phone next to a car accident.

Underinsured vs. Uninsured Motorist

Updated May 4, 2024 . AmFam Team

Did you know that car insurance is required in almost every single state? Though you may be a savvy driver who abides by the rules and has the right coverage in place, unfortunately there are still people on the road without proper protection. So, what happens if a driver hits you and they don’t have enough liability coverage or any coverage at all?

That’s where underinsured and uninsured motorist coverages step in. These coverages are designed to financially protect you from an at-fault driver who doesn’t have enough or any liability coverage.

Let’s dive a little deeper to see how these coverages work.

A smiling person sitting on her couch while looking at her phone.

What does underinsured motorist insurance cover?

Here’s the deal — though a driver may have the minimum amount of liability insurance to be legal in their state (it’s different in every state), their coverage may not be enough to cover your damages and injuries that result from an accident they caused. That’s why you’ll want underinsured motorist coverage.

Underinsured motorist bodily liability coverage helps protect you financially if you’re in an accident with an at-fault driver who has some auto insurance, but their limits aren’t high enough to cover your full expenses after a claim. It includes coverage for the insured members of your household, as well as the passengers in your vehicle.

So, let’s say you get into an accident caused by an underinsured driver. Their insurance may help pay for injuries up to their policy limit, and your underinsured motorist coverage may step in and cover the remaining amount up to your policy limits. If you don’t have this coverage, you could be left paying out-of-pocket for some of the medical expenses — even though it wasn’t your fault!

For example: You sustain $40,000 worth of bodily injury expenses. The driver who hit you is only covered for $25,000. Because you have $100,000 worth of underinsured motorist property damage, your insurance may help cover you for the remaining $15,000.

A person holding the back of her neck while standing next to a car accident.

Underinsured motorist bodily injury coverage may help with the following:

  • Medical expenses for injuries that resulted due to the accident
  • Loss of income
  • Funeral costs
  • The costs of treating emotional and mental issues that result from an accident

A car in a parking lot with a damaged back end.

What does uninsured motorist insurance cover?

Uninsured motorist coverage provides similar protection as underinsured motorist coverage, but in this case, you’re protected from drivers who have zero car insurance. Not only is that driver cruising around illegally (given they’re not from New Hampshire), but it also means that they probably won’t be paying you for damages and injuries sustained during the accident.

Having uninsured motorist bodily liability coverage may help you avoid a situation where you’re left paying a big chunk of money for an accident you didn’t cause. It may financially protect you, the insured members of your household and the passengers in your vehicle. This coverage may even help protect you for injuries sustained from hit-and-run accidents.

Two cars that have been in an accident.

Uninsured motorist bodily injury coverage may help cover:

  • Medical expenses for injuries that resulted due to the accident
  • Loss of income
  • Funeral costs
  • The costs of treating emotional and mental issues that result from an accident

Take a look at our tips for handling an accident with an uninsured driver.

You also might hear of uninsured motorist property damage liability coverage. This may help pay for damages to your vehicle if the at-fault driver doesn’t have car insurance. Uninsured motorist property damage liability coverage isn’t offered in every state and usually isn’t required either.

A family embracing as they drop off their teen to university.

Do I need underinsured or uninsured motorist coverage?

So, do you actually need underinsured or uninsured motorist coverage? It depends. Some states require one or both of the coverages, while other states offer them as optional coverage. Either way, the peace of mind this coverage provides is worth having.

Underinsured and uninsured motorist coverages are important pieces of any insurance package. If you want to proactively plan for the unexpected, your agent can help you better understand what coverage is offered or required in your state — connect with yours today for confidence on the road.

This is for informational purposes only, is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Exclusions may apply to policies, endorsements, or riders. Coverage may vary by state and may be subject to change. Some products are not available in every state. Please read your policy and contact your agent for assistance.

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