About 1 in 7 drivers is uninsured, according to the Insurance Research Council. That means that at any given busy intersection, at least one driver could be uninsured or underinsured.

So what happens if you another driver causes an accident with your car, but they don’t have the insurance to cover your injuries and vehicle damage? 

That’s when your uninsured and underinsured motorist coverage steps in. These policies cover you in the case that another driver is found at-fault for an accident that has caused you injuries or damage. 

But there are a few types of uninsured and underinsured motorist policies to consider.

What does your uninsured/underinsured motorist policy cover? Does it cover damage to your car as well as liability?

Uninsured Motorist Coverage

Uninsured motorist coverage protects you in the event that the other driver—who caused the accident and is found at-fault—doesn’t have auto insurance at all.

For example, you’re going through an intersection, and another driver runs a red light and hits your car. They’re at fault for the accident, but they don’t have auto insurance. However, you still have injury and damage expenses that need to be covered.

Your uninsured motorist coverage would step in to help cover these costs.

There are two types of uninsured motorist coverage, though. There’s one policy for any medical injuries you incur and another for any property damages to your car. We get into the differences below.

Uninsured Motorist Bodily Injury

Uninsured motorist bodily injury (UM or UMBI) is when you incur medical expenses that are caused by an uninsured driver. It will also help cover injuries that are caused by a hit-and-run when the driver isn’t found.

Requirement: Most states require that you hold UM coverage in the case of an accident. It’s a good idea to hold UM insurance regardless, because it plays a critical role in protecting your health and wellness.

If UM is not required by your state, health insurance and collision coverage could potentially pay for some of your medical expenses. However, you would be subject to deductibles that are not usually applicable to a UM policy.

Coverage: Uninsured bodily liability helps cover medical expenses, lost wages, and pain and suffering. The limits usually mirror the limit you have for your own bodily injury liability coverage. That’s because, theoretically, this insurance takes the place of the other driver’s missing bodily injury liability insurance.

UM will help cover you and any other harmed individuals in the vehicle. It will not cover drivers who are not listed on your insurance, but it will help cover all passengers and permissive drivers.

UM will not cover any damages to your car or property. That’s where uninsured motorist property damage comes in.

Uninsured Motorist Property Damage

Uninsured motorist property damage (UMPD) helps cover costs related to your vehicle’s damages if the at-fault driver does not have any auto insurance.

Requirement: UMPD is only mandatory in some states. Often, UMPD and collision insurance are redundant, especially because UMPD limits are usually much lower than collision coverage limits.

Coverage: UMPD helps cover repairs or replacement for your vehicle if struck by an uninsured driver. It will cover up to your limits of UMPD.

UMPD does not cover hit-and-runs or miss-and-runs (when another driver doesn’t hit you but causes you to crash). This is because fraudulent claims would be too easy. For example, a driver could hit a stop sign and claim it was a hit-and-run so they wouldn’t have to make a collision claim (because collision coverage has a deductible and making a claim could cause your premiums to rise in the future).

Note: You can choose to sue the other driver for expenses as well. If you take payment from your uninsured motorist coverage and you win the lawsuit against the other person, you’ll need to reimburse the insurance company the cost that they paid you from the UMPD policy.

Underinsured Motorist Coverage

Underinsured motorist coverage steps in when the at-fault driver has insurance but their limits are not enough to pay for all of your expenses. Like uninsured motorist coverage, there is a difference between bodily injury and property damage policies.

Underinsured Motorist Bodily Injury (UIM/UIMBI)

Underinsured motorist bodily injury will help cover medical expenses when a driver who doesn’t have enough insurance causes an accident with you. This refers to anyone whose bodily injury liability limit is not enough to cover your losses, and they are less than your UIM limits.

For example, they have $10,000 in bodily injury liability. You have a UIM limit of  $50,000. You incurred injuries of $30,000. Likely, you’ll be paid $10,000 from the at-fault driver’s insurance, and then your UIM insurance would cover the remaining $20,000.

Underinsured Motorist Property Damage (UNDPD)

Underinsured motorist property damage helps pay for damage to your vehicle if the at-fault driver doesn’t have enough property damage liability in their auto insurance. This is the least common form of uninsured/underinsured coverage, because a collision policy is usually more thorough and has higher limits.

If you make a UNDPD claim, you’ll usually have to show proof of a settlement with the other party that shows they can only pay for a certain portion of your loss. The insurance company would then step in to help cover the additional expenses up to your UNDPD limits.

Insurance companies have to be careful of fraud with UNDPD, so it can sometimes be challenging to get paid out. Collision coverage is typically a better option, so you should discuss this with your insurance agent. 

Conclusion

Uninsured and underinsured coverage is one of the more important aspects of your auto insurance. It supplements liability, collision/comprehensive, and personal injury to make sure your expenses are fully covered in the case of a serious accident.

But not all uninsured and underinsured insurance policies are created equally. Uninsured/underinsured bodily injury won’t cover for property damage to your car and vice versa. In some states with some insurers, the coverages are bundled together—but this isn’t always the case.  

So work with an InsuraMatch advisor by calling (844) 819-2221 to get the most thorough coverage to protect you, your passengers, and your car.

An insurance advisor can help you determine your risk and whether it makes sense to add UM coverage. Call us at (844) 819-2221 to dicuss your auto insurance options.

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