What is uninsured and underinsured motorist coverage?

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  • Uninsured and underinsured motorist coverage protect you if someone without adequate car insurance hits you.
  • This coverage falls under liability insurance, which also covers damage you cause to other vehicles or drivers.
  • Liability insurance is required by law in most states, but some states do not require uninsured motorist coverage.

Liability car insurance is required by state law in most states. But according to Michael Dietry, assistant vice president of personal line products and services at Dairyland Insurance, in 2017, 13% of motorists (or 1 in 7 drivers) were uninsured. In addition, countless drivers buy the minimum coverage, which often comes in low for major accidents. 

While liability coverage is required, many drivers choose to also buy comprehensive, collision, and medical coverage to protect their property and cover ambulance and other medical bills. If you’re financing your car or leasing, the bank may require it. However, depending on your state, uninsured motorist coverage and underinsured coverage are not required, leading some drivers to opt-out.

Particularly if you choose not to carry full coverage (comprehensive and collision), this could leave you in a pinch. You may have the right to sue an uninsured driver for damages. But even in a successful lawsuit, you could wait months, or even years, to see your winnings. Uninsured and underinsured motorist coverage bridges the gap to ensure you can move on with your life. 

What are uninsured and underinsured motorist coverages?

Liability insurance covers damage you cause to the other vehicle, driver, and its passengers. It also includes uninsured motorist (UM) and underinsured motorist (UIM) coverage to protect you when an at-fault driver with no coverage or insufficient coverage hits you. If your state requires it or you choose UM or UIM, the limits will mirror your chosen liability coverage (i.e. if you choose state minimums, your benefits will be limited to that).

Dietry said uninsured and underinsured coverage is required in 22 states, but minimum car insurance requirements for liability insurance vary by state.

What does uninsured and underinsured insurance cover?

Uninsured and underinsured liability insurance covers damage to you or your vehicle caused by someone with no (or insufficient) auto insurance. Check our chart to see what parts of your car insurance would cover each situation.

*Most states require some type of liability coverage

Comprehensive car insurance coverage replaces or repairs your vehicle if it’s stolen or damaged. It also covers damage from fire, vandalism, or falling objects like a tree or hail. Essentially, it’s designed to protect your property when damaged due to something other than a collision.

Collision insurance covers accidents and collisions. If you lease or finance your vehicle, your lender may require full auto insurance coverage.

Who needs uninsured and underinsured liability insurance?

Below is a list of states that require uninsured or underinsured motorist coverage, according to the Insurance Information Institute (III).

Coverage minimums are listed with numbers and slashes. For example, a 50/100/50 policy would cover up to $50,000 of injury protection for each person involved in an accident, up to $100,000 worth of injuries per incident, and up to $50,000 of property damages per incident. 

New Hampshire, Rhode Island, and Virginia are distinct, and exceptions to this rule may apply. New Hampshire doesn’t require auto insurance, but rather proof of financial responsibility that can be in the form of car insurance. If you buy insurance, underinsured and uninsured motorist coverage would be required.

Similarly, drivers in Rhode Island with only the state minimums for liability coverage would not need this additional coverage as the state views it as redundant. However, if you increase your liability limits, UM and UIM would be added to your policy.

Finally, Virginia allows drivers to opt out of auto insurance if they have enough approved assets to pay the state liability minimums. If you buy insurance, UM and UIM would be required.

How much does uninsured motorist insurance cost?

The cost of liability coverage varies depending on your state, as some states require more coverage than others. Dietry said uninsured and underinsured motorist coverage is more expensive in states with high uninsured rates.

Remember, your average cost will vary based on the type of vehicle, your location, mileage, and driving record. The  table below shows the average annual liability insurance cost by state, according to the Insurance Information Institute.

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