Underinsured motorist (UIM) coverage isn’t just a nice-to-have if you can afford it. In a lot of cases, it’s the thing standing between you and a mountain of debt after a crash that wasn’t even your fault. Even though some states require it, most don’t, and that’s exactly why it’s easy to skip over. But skipping it could cost you way more in the long run.
When someone hits you, and their insurance can’t cover your losses, things get ugly fast. You could be stuck with huge medical bills, ongoing therapy costs, or a car you can’t afford to replace. In theory, you can sue them for the difference, but that only works if they actually have money or assets you can collect. And let’s be practical here, if they couldn’t afford decent insurance, they probably don’t have anything to give you in a lawsuit.
Nonetheless, you need to seek out help immediately, especially from a lawyer who knows how these claims work.
What Exactly Does UIM Cover?
UIM coverage breaks down into two main pieces. First is bodily injury coverage, which helps with your medical bills and maybe lost wages if you can’t work. Second is property damage coverage, which pays for fixing or replacing your car.
You should keep in mind that UIM does not cover hit-and-runs. That’s actually a super common misunderstanding. In most states, if someone hits you and drives off, they count as uninsured, not underinsured. So that’s where uninsured motorist (UM) coverage kicks in, not UIM.
In some places, you might also need collision coverage for that. Again, check with your insurance company to know what’s actually in your policy and what isn’t.
Some states only offer the bodily injury part, not the property damage side. So if you’re not sure what applies where you live, your best bet is to call your insurance agent or your local DMV and ask directly.
Don’t assume it’s all included just because you see “UM” or “UIM” on your insurance summary. It might not mean what you think it does.
Where Is UIM Actually Required?
This part’s pretty cut and dry. UIM coverage isn’t required everywhere, but there are several states where the law says you’ve got to have it. If you’re in Connecticut, Kansas, Maine, Maryland, Minnesota, Nebraska, North Carolina, North Dakota, Oregon, South Dakota, or Vermont, then yeah, it’s mandatory.
In New Hampshire and Virginia, you don’t have to buy car insurance at all, but if you do, UIM is required. Rhode Island makes you carry it if you go above the minimum liability limits. Illinois and New Jersey have their own weird rules: Illinois only requires it if you go above minimum UM coverage, and New Jersey only if you have a standard auto policy.
So, depending on where you live, you might already have UIM and not even know it. But in most places, it’s still optional. And that’s where making a smart choice comes in.
Should You Actually Buy It?
Here’s the straight-up answer to this: unless you live in a state where it’s already required and taken care of, you really need to think seriously about adding it. Especially if you’re in a place where people tend to drive around with low-limit insurance policies, which is honestly a lot of the U.S.
You have to remember, liability minimums in some states are laughably low. They’re designed to make sure people have insurance, not that it’s good insurance. If someone hits you with a bare-minimum policy and your injuries or car damage go way beyond what their policy covers, you’re screwed unless you’ve got UIM.
Getting stuck paying thousands of dollars in bills just because the other driver wasn’t responsible enough to carry decent insurance is something you can avoid by adding or raising your UIM coverage now.
