Uninsured and underinsured motorist coverage, explained

Uninsured motorist (UM) coverage pays for your injuries, and in some policies your car, when the at-fault driver has no insurance or drives off. Underinsured motorist (UIM) coverage pays when the at-fault driver's insurance isn't enough. With about one in three U.S. drivers uninsured or underinsured, it's one of the most useful coverages on a policy.

By the Fast Insurance Group editorial teamPublished by Marcus L. Barber, former licensed Maryland property and casualty producer (2010–2012)Reviewed by Marcus L. Barber on October 17, 2026Updated October 17, 2026

This guide is general education, not advice for your situation. We're an independent publisher, not an insurer or agent, and we may earn a commission from partner links. How we make money.

How the coverage works

Normally, if another driver causes a crash, their liability insurance pays for your injuries and car. Uninsured and underinsured motorist coverage is your own insurance standing in for theirs when they don't have it, or don't have enough. You file the claim with your own insurer, which then pays you up to your limits as if it were the other driver's insurer.

The risk is real. The Insurance Research Council estimates that 15.4% of drivers were uninsured in 2023, and that 33.4% were either uninsured or underinsured, up 10 points since 2017. Rates ranged from 28.2% uninsured in Mississippi to 5.7% in Maine.

The parts: UMBI, UMPD and UIM

Depending on the policy, UM and UIM can also protect you as a pedestrian or cyclist hit by a car, and when you ride in someone else's vehicle.

How underinsured coverage pays

States handle underinsured claims one of two ways, and the difference can be large:

• Excess (add-on): your UIM pays on top of what the other driver's insurance paid. With $30,000 from their policy and $100,000 of your UIM, you could recover up to $130,000.
• Difference in limits (offset): your UIM pays only the difference between your limit and what you recovered. In the same example, your UIM pays at most $70,000, for $100,000 total.

North Carolina and Virginia both now use the excess approach by default, which makes UIM more valuable there.

Hit-and-run accidents

UM coverage usually treats a driver who can't be identified as uninsured, so it can pay for your injuries after a hit-and-run. Conditions vary by state. Texas won't pay a hit-and-run claim you didn't report to police. North Carolina requires a collision between vehicles for an unidentified-driver claim. Virginia requires prompt reporting to police or your insurer when there was no contact, and lets insurers exclude the first $200 of property damage when the driver is unknown. Report any hit-and-run to police right away and get the report number.

Which states require it

According to the Insurance Information Institute, 20 states and Washington, D.C. require uninsured or underinsured motorist coverage. In many other states, insurers must offer it; Texas, for example, requires you to reject it in writing if you don't want it. Requirements change, so check your state insurance department or your declarations page to see what you have.

North Carolina and Virginia rules

• North Carolina: for policies effective on or after July 1, 2025, the minimum liability limits rose from 30/60/25 to 50/100/50, and underinsured motorist coverage is now required on every personal auto policy, including minimum-limit policies. UM limits generally match your highest bodily injury liability limit, and UIM pays in excess of the at-fault driver's coverage. UM property damage carries a $100 deductible.
• Virginia: every policy must include UM/UIM coverage at limits equal to your liability limits unless you reject the higher amounts. Minimum liability limits rose to 50/100/25 for policies effective on or after January 1, 2025. Virginia UIM pays without a credit for the other driver's coverage unless you choose otherwise.

How much to buy

A simple, widely used rule is to match your UM/UIM bodily injury limits to your liability limits. If you'd want $100,000 per person to protect someone you injure, you probably want the same protection for yourself. Consider higher limits if:

• Your health insurance has a high deductible or doesn't cover lost wages.
• You commute long distances or drive in a state with many uninsured drivers.
• You have family members who ride with you often.

Ask for quotes at a few limit levels to see what each step up costs; see car insurance coverage types for how it fits with the rest of a policy.

Stacking

Some states let you "stack" UM/UIM: add the limits for each car on your policy, or across policies, together. With two cars and $50,000 of UM each, stacked coverage could pay up to $100,000. Pennsylvania allows stacking unless you waive it on a signed state form. Other states limit or prohibit stacking, and North Carolina doesn't allow it within one policy. Ask your insurer whether stacking is available and what it costs.