Insurance Law, Insurance Companies

An uninsured driver is someone who did not have any insurance, had insurance that did not meet state-mandated minimum liability requirements, or whose insurance company denied their claim or was not financially able to pay it. A hit-and-run driver also counts as uninsured as it relates to bodily injury (UMBI).An underinsured driver is someone who met minimum legal financial responsibility requirements, but did not have payment limits high enough to cover the damage they caused. In these cases, UM or UIM can pay you for your damages.

It is important to note that uninsured and underinsured motorist protections are separate, although in many states they can or must be purchased together.

A handful of states mandate purchase of UM/UIM, but most do not. If you purchase uninsured/underinsured motorist protection, your UM/UIM payment limits usually must comply with the state minimum but can't exceed your liability limits. If your state and company allow uninsured motorist property damage (UMPD) coverage, it can't be purchased without UMBI. Also, note that if you're in an accident and try to settle payment with the other driver by yourself, you won't be able to file a claim for UM/UIM protection. It's always best, regardless of what's in your policy, to contact your insurance company for advice on how to handle an accident.
Why Would You Want It?

The Insurance Information Institute's Vice President, Carolyn Gorman, extols the virtues of UM/UIM. "You absolutely need this coverage, because, if you get into an accident with someone who is driving without insurance or doesn't have enough of it, you want to be made financially whole again. You have to protect yourself fiscally and physically, and uninsured/underinsured motorist protection can help you in that regard."

It's usually relatively cheap to add uninsured/underinsured motorist protection to your car insurance policy, especially considering the amount of protection it offers. It could pay your medical bills, lost wages, and pain and suffering. If someone hits you or your car and is legally responsible for the damages, you won't get any money from them if they don't have money to give you. Especially during times when people are struggling economically, many drivers either don't have insurance or don't have enough. If you have UM/UIM, you can get money even if the other driver can't pay.