Picture this: you're stopped at a red light when suddenly, you're rear-ended hard enough to total your car and send you to the emergency room. The other driver is clearly at fault. But when the police arrive, you learn they have no insurance. Zero. Now what? This is where uninsured motorist coverage becomes your financial safety net. With more than one in seven drivers on American roads operating without insurance—and that number climbing to nearly one in three in some states—this coverage isn't just nice to have. It's essential.
What Is Uninsured and Underinsured Motorist Coverage?
Uninsured motorist coverage, often abbreviated as UM, protects you when you're hit by a driver who has no auto insurance. Underinsured motorist coverage, or UIM, steps in when the at-fault driver has insurance, but their policy limits are too low to cover all your damages. Think of these as insurance for your insurance—a backup plan when the system fails you.
These coverages typically come in two flavors: bodily injury protection (UMBI/UIMBI) and property damage protection (UMPD/UIMPD). Bodily injury coverage handles your medical bills, lost wages, and pain and suffering when you're injured. Property damage coverage repairs or replaces your vehicle. Depending on your state, these might be sold separately, bundled together, or offered as up to four distinct coverage types.
Here's a real-world example: You're in an accident that causes $75,000 in medical bills and vehicle damage. The at-fault driver only carries their state's minimum liability limit of $25,000. Without underinsured motorist coverage, you're personally on the hook for the remaining $50,000. With UIM coverage at $100,000, your policy covers that gap, minus any deductible.
Why You Need UM/UIM Coverage (Even If It's Optional)
The numbers are sobering. According to the Insurance Research Council, 15.4% of motorists were uninsured in 2023—up from 11.6% in 2017. That's more than 35 million drivers operating without coverage. The problem is even worse in some states: Mississippi leads the pack at 28.2% uninsured, followed by New Mexico at 24.1%. Even if you live in a state with better compliance, like Maine at 5.7%, you're still sharing the road with thousands of uninsured drivers.
But here's what really makes UM/UIM coverage critical: medical costs for car accidents are astronomical. A non-incapacitating injury from a car crash costs an average of $23,400 to treat. More severe incapacitating injuries? About $72,700. State minimum liability limits—often just $25,000 or $30,000 per person—don't come close to covering these expenses. And when the at-fault driver can't pay, you're left with the bill unless you have UM/UIM protection.
The good news? UM/UIM coverage is surprisingly affordable. It typically costs significantly less than your primary liability coverage because your insurer only pays out when the other driver is at fault and lacks adequate insurance. For many drivers, adding robust UM/UIM protection adds just a few dollars to their monthly premium.
State Requirements and Recent Changes
Only 21 states and Washington, D.C. currently require some form of UM/UIM coverage. A few states, like Illinois and New Hampshire, mandate both uninsured and underinsured motorist coverage. Others, like Massachusetts and South Carolina, only require uninsured motorist protection. In the remaining states, UM/UIM coverage is optional—though insurance companies typically must offer it, and you may need to actively decline it in writing.
Several states have recently increased their UM coverage requirements in response to rising accident costs. Starting January 1, 2025, Virginia and North Carolina both raised their minimum UM coverage to $50,000 per person and $100,000 per accident. New Jersey is following suit, with limits scheduled to increase to $35,000 per person and $70,000 per accident in January 2026. These changes reflect a growing recognition that previous minimums simply weren't protecting drivers adequately.
Even if your state doesn't require UM/UIM coverage, that doesn't mean you should skip it. State minimums are designed to ensure basic compliance, not to provide comprehensive protection. Your insurance agent can help you understand your state's specific requirements and recommend coverage levels appropriate for your situation.
Understanding Stacked vs. Unstacked Coverage
If you insure multiple vehicles, you might have the option to stack your UM/UIM coverage—though only 32 states allow this. Stacking means combining the coverage limits from each vehicle to create a larger pool of protection. It's one of those insurance features that sounds complicated but is actually pretty straightforward once you see how it works.
Let's say you have $25,000 in uninsured motorist bodily injury coverage and you insure two cars on your policy. With stacked coverage, your total protection becomes $50,000 per accident. Three cars? That's $75,000. This multiplication effect can dramatically increase your protection without having to purchase a separate, expensive umbrella policy.
There are two types of stacking. Vertical stacking applies when all your vehicles are on the same policy—you're stacking within one policy. Horizontal stacking happens when you have multiple vehicles insured under separate policies with the same carrier, and you stack across those different policies. Important note: stacking only applies to the bodily injury portion of your coverage, not property damage.
The tradeoff? Stacked coverage costs more than unstacked. However, for many families with multiple vehicles, the extra premium is worth it for the peace of mind. If you're in a state that allows stacking, ask your insurance agent to quote both options so you can make an informed decision based on your budget and risk tolerance.
How Much UM/UIM Coverage Do You Actually Need?
Here's where a lot of people make a costly mistake: they buy the bare minimum their state requires, or they match whatever limits seemed reasonable when they first bought their policy years ago. Insurance experts are unanimous in their advice: your UM/UIM limits should match your liability coverage limits. If you carry $250,000/$500,000 in liability coverage, you should have the same in UM/UIM protection.
At minimum, consider coverage of at least $100,000 per person and $300,000 per accident for bodily injury, with $100,000 for property damage. Why these numbers? They provide meaningful protection against the actual costs of moderate to severe accidents. Remember, even a non-incapacitating injury averages over $23,000 in medical costs, and that's before considering lost wages, ongoing treatment, or pain and suffering.
Some experts recommend even higher limits—$250,000 per person and $500,000 per accident if your budget allows. The cost difference between adequate coverage and excellent coverage is often just $10 to $20 per month, which is trivial compared to the financial devastation of being underinsured after a serious accident.
Getting the Right Coverage for Your Situation
If you're shopping for auto insurance or reviewing your current policy, here's what to do: First, check what UM/UIM coverage you currently have. Many people are surprised to discover they have minimal protection or none at all. Second, get quotes with UM/UIM limits that match your liability coverage. Compare the price difference—you'll likely find it's more affordable than expected. Third, if you have multiple vehicles, ask about stacking if it's available in your state.
Don't be afraid to ask questions. How does the coverage work if you're hit by an uninsured driver? What's the claims process like? Are there any exclusions you should know about? A good insurance agent will walk you through these details and help you find the right balance between protection and cost. With one in seven drivers uninsured and medical costs continuing to rise, UM/UIM coverage isn't optional—it's one of the smartest financial protections you can buy.
