Marissa Hayes is a technical editor and contributing writer. She holds a Bachelor’s Degree in history, and she was the editor of the literary magazine, The Bluestone Review.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Car Insurance Agent Daniel Walker

UPDATED: Jul 19, 2021

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What is underinsured motorist coverage?

Underinsured motorist coverage is generally grouped together with an uninsured motorist add-on to an auto insurance policy. If uninsured motorist coverage is for medical expenses and personal injury costs caused by a driver without insurance, what is underinsured motorist coverage meant to do?

Underinsured motorist coverage exists because many drivers out there purchase only the minimally required limits in car insurance. Each state sets its own rules regarding car insurance, including how much must be purchased by each registered car owner to legally comply. Some states do not require drivers to purchase car insurance at all, making it tricky to know just how much insurance to purchase. Those seeking to save on monthly premiums may purchase only a very basic policy and these policies have monetary limitations. Underinsured motorist coverage is meant to protect you from drivers who do not have enough insurance to pay for the damages they inflict in a collision.

To use an example, if a driver only has $15,000 in bodily injury coverage but the damages equal $40,000, then you would be responsible for paying the difference in costs. Underinsured motorist coverage would kick in at this point to assist you in paying the additional expenses.

What does underinsured motorist entail?

Underinsured motorist coverage generally reimburses for these types of damages: medical bills, lost wages, disfigurement, pain and suffering, and emotional distress. Underinsured motorist coverage does not reimburse for property or punitive damages.

The majority of health insurance plans do not reimburse for items such as lost wages or pain and suffering, focusing instead of the specific medical expenses of the accident. For drivers looking to recoup those types of damages, underinsured motorist coverage is the way to go. Otherwise, the only way to seek this money is to go to civil court and try to win the money back in a lawsuit.

Am I required to buy underinsured motorist coverage?

Most states do not require motorists to purchase uninsured or underinsured motorist coverage. However, there are a few states that do mandate some minimum UM/UIM coverage limits that must be met. You will have to look up what your state requires in terms of underinsured motorist coverage.

Even if your states does not make it a legal necessity, most states do recommend that motorists consider purchasing uninsured and underinsured coverage as an add-on to their car insurance policy.

Keep in mind that uninsured and uninsured motorist coverages only protect against damages caused by others in a collision. If the at fault motorist cannot pay for the damages they have caused, that is where UM/UIM comes in handy. To protect against the damages you might cause to others, liability insurance is necessary.

How much underinsured motorist should you buy?

If you live in a state that mandates uninsured and underinsured coverage, then that state will determine what your minimum requirements will be for this type of insurance.

In states where UM/UIM is optional, it is best to ask around and see what a typical level of coverage is. Obviously, the more insurance you purchase, the better protected you will be. It is also important, though, to take into consideration the make, model, age and value of your car in determining how much coverage you may need. If you car is not valued highly, then it makes more sense to get minimal insurance.

Recent statistics suggest that at least 1 in every 7 drivers is operating a vehicle without car insurance. Of those who are insured, the majority are purchasing only the minimum required limits. If you own a new or expensive vehicle, the more protection you have against other drivers on the road, the better.

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What is the difference between uninsured and underinsured motorist coverage?

Uninsured motorist coverage is to protect individuals who have either been struck by a driver without insurance or been the victim of a hit and run accident. Underinsured motorist coverage is to cover expenses that exceed the responsible driver’s insurance coverage limitations. These types of auto insurance coverage serve different purposes but are often grouped and purchased together.
Is property covered with underinsured motorist coverage?

Most underinsured motorist policies are for medical expenses and bodily injury costs only. For drivers wanting to protect their property from drivers with minor insurance limits, underinsured property damage coverage may also be needed. Ask your car insurance company for details.

Having underinsured motorist coverage not only saves on personal expenses, but can be a more convenient solution instead of seeking to pursue the claim in court.