Uninsured motorist (UM) coverage pays for your injuries, and in some states your car, when the at-fault driver has no liability insurance or can't be identified after a hit-and-run. Underinsured motorist (UIM) coverage pays when the at-fault driver's limits are too low to cover your loss. Both are part of your own auto policy, so you claim against your own insurer instead of chasing a driver who may have nothing to collect. The premium is small for what it protects, and in most states removing it takes a signed written waiver.
In the Insurance Research Council's 2025 study "Uninsured and Underinsured Motorists: 2017 to 2023," 15.4% of U.S. drivers were uninsured in 2023, more than one in seven, and one in three were either uninsured or underinsured.[1] Here is how the coverage works on personal and commercial policies.
Uninsured Motorist Coverage
Uninsured motorist coverage is first-party auto insurance that pays for bodily injury, and sometimes vehicle damage, caused by an at-fault driver who carries no liability insurance or flees the scene. It substitutes your own insurer for the missing one, up to the UM limit you purchased.
What Is Uninsured Motorist Coverage?
Uninsured motorist (UM) coverage is first-party coverage on your own auto policy that stands in for the liability insurance the at-fault driver should have had. If an uninsured driver injures you, your UM coverage pays what their liability coverage would have paid: reasonable medical expenses, lost income and other damages for your injuries, up to your UM limit. With UM limits of 100/300, you could collect up to $100,000 per injured person and $300,000 for everyone injured in one crash, from your own insurer. The coverage also applies when the at-fault driver's insurer denies coverage or goes bankrupt, and in most states when a hit-and-run driver can't be identified.
Because you are claiming against your own insurer, disputes usually go to arbitration rather than a lawsuit against a driver who can't be found. UM coverage generally follows people rather than vehicles, so it covers you and family members living with you as pedestrians, cyclists and passengers in other cars.
What Is the Difference Between UM Bodily Injury and UM Property Damage?
UM has two parts that you buy separately: bodily injury covers people, and property damage covers your car. Uninsured motorist bodily injury (UMBI) pays for injuries to you and your passengers, and state law sets its rules. Uninsured motorist property damage (UMPD) pays to repair or replace your vehicle, and it usually comes with a cap, a deductible or an identification requirement that UMBI does not have. Buyers often confuse the two.
If you carry collision coverage, UMPD adds little, because collision pays for your car whoever was at fault. UMPD is worth the most to drivers without collision, and in states where it pays your collision deductible when an uninsured driver hits you. Here is how the parts fit together:
| Coverage | What it pays | Watch for |
|---|---|---|
| UM bodily injury | Medical bills, lost wages, pain and suffering for you and your passengers | The core coverage. Limits written per person / per accident, like 100/300 |
| UM property damage | Repair or total loss of your vehicle | Low caps in some states ($3,500 in California), and hit-and-run claims often excluded |
| Underinsured motorist | The shortfall when the at-fault driver's limits are less than your damages | Offset and excess math differ by state |
How Does Underinsured Motorist Coverage Work?
Underinsured motorist coverage applies when the at-fault driver has liability insurance but not enough to pay for your injuries. If a driver with a state-minimum policy causes $200,000 of injuries, most of your claim is uncovered. How much UIM pays depends on whether your state is an offset state or an excess state. In an offset state (also called a gap or reduced-by state), every dollar the at-fault driver's insurer pays is subtracted from your UIM limit. In an excess state, your UIM limit sits on top of what the at-fault driver's insurer pays. With the same limits, the difference can be large.
Offset states create a practical problem: a UIM limit equal to the state minimum can be wiped out entirely once the at-fault driver's payment is credited. In offset states, brokers should quote UIM limits well above the minimum, because only the difference can ever be paid. Settling is the other hazard. Many states, including California, let the insurer deny UIM if you settle with the at-fault driver without your insurer's written consent (Insurance Code section 11580.2).[2] Cash the other carrier's policy-limits check before you have your insurer's consent letter and your UIM claim can disappear.
How Does Uninsured Motorist Coverage Work in California?
California requires UM bodily injury coverage on every auto liability policy under Insurance Code section 11580.2. The named insured can delete it or lower its limits only by signing a written waiver, and the waiver stays in effect until the named insured revokes it.[2] California is also an offset state for UIM and does not allow stacking, so only one limit applies per accident.
Starting January 1, 2025, Senate Bill 1107 raised California's minimum liability limits to $30,000 per person and $60,000 per accident, which also raised the UM limits insurers must provide.[3] You can carry UMBI limits equal to your liability limits, but the insurer is not required to offer more than 30/60. UMPD is a separate coverage under Insurance Code section 11580.26. If you carry collision, it pays your collision deductible when an uninsured driver hits you. If you don't, it pays the lesser of your car's actual cash value or $3,500. Either way, it pays only if there was physical contact, the uninsured driver or vehicle is identified, and the accident is reported to your insurer within 10 business days.[4] There is also a deadline for UM bodily injury claims: under section 11580.2(i), within two years of the accident you must sue the uninsured driver, reach a written agreement on damages with your insurer, or demand arbitration by certified mail, or the claim is barred.[2]
In California, waiving UMBI saves very little and gives up your only realistic way to recover from the state's many uninsured drivers. Keep it, and match it to your liability limits.
How Much Uninsured Motorist Coverage Should You Buy?
Buy UM limits equal to your liability limits. Most insurers won't write a UM limit above your liability limit, so your liability choice sets the ceiling, and UM usually costs only a small share of the liability premium. The reasoning is simple: the injuries that made you buy $250,000 of liability coverage for strangers are the same injuries you and your passengers could suffer. Buying 250/500 liability with 30/60 UM says a stranger's back is worth more than yours.
Check your umbrella too. A personal umbrella policy raises your liability limits but usually excludes UM/UIM unless you add an "excess UM" or "umbrella UM" endorsement, which only some carriers offer. If your household's potential injuries exceed the UM limit on your auto policy, that endorsement is the only way to bring UM up to your umbrella limit.
How Does UM/UIM Work on a Commercial Auto Policy?
On a business auto policy, UM and UIM appear as their own lines on the declarations and are added by a state-specific endorsement, not the CA 00 01 coverage form itself. ISO publishes a separate UM endorsement for each state in its CA 21 series. Each coverage line also needs a covered auto symbol beside it. Symbols 2, 3, 4 and 7 can be used for UM, and symbol 6 applies to autos garaged in states where UM cannot be rejected.
Every state where vehicles are garaged has its own offer, rejection and limit selection forms. A missing or defective rejection form can put UM into the policy at the full bodily injury liability limit by law. Florida is an example: Section 627.727 of the Florida Statutes sets UM equal to the bodily injury liability limits unless a named insured signs a written rejection or selects lower limits.[5] So a $1,000,000 liability policy with a badly completed rejection form carries $1,000,000 of UM.
Frequently asked questions
Is uninsured motorist coverage required by law?
It depends on the state. Some states make UM bodily injury mandatory and impossible to reject, which is why business auto symbol 6 exists. Many others, including California, require it unless you reject it in writing. No state stops you from buying it, and a signed written waiver is the only legitimate way to remove it from your policy.
Does uninsured motorist coverage pay for damage to my car?
Only the property damage part, UMPD, and only where it is available. UM bodily injury never pays for vehicles. UMPD often has limits, like California's $3,500 cap, and usually requires the uninsured driver or vehicle to be identified. If you carry collision, your car is already covered, and UMPD mostly covers your collision deductible.
What happens if I rejected UM coverage and an uninsured driver hits me?
Your own policy does not pay for your injuries, and your only claim is against a driver who, by definition, has no insurance and often little money to collect. Health insurance covers some treatment but not lost wages or pain and suffering. You can revoke a UM waiver at any renewal, and often mid-term, by asking your insurer in writing.
Is underinsured motorist coverage worth it if I already have health insurance?
Yes, for most people. Health insurance pays only medical bills, after your deductible and within its network, and your health insurer may place a lien on any accident recovery you receive.
UIM also pays lost income and pain and suffering, which no health plan covers, and it protects your passengers too.
The two coverages overlap much less than their names suggest.
This guide is for educational purposes and summarizes standard ISO policy language. Your policy's specific terms, conditions, and endorsements control. Talk to a licensed broker about your actual exposures.
Two things to check on your auto policy today
Check two things: that your UM/UIM limits match your bodily injury liability limits, and that there is no old UM waiver on file. UM/UIM makes your own policy the payer when the at-fault driver has no insurance or not enough, and it costs little. With more than one in seven drivers uninsured, it is the only reliable way to recover for injuries such a driver causes. In an offset state like California, a minimum UIM limit can pay nothing at all.
References
- 1.Insurance Research Council. “One in Three Drivers Are Either Uninsured or Underinsured in the U.S..” https://www.insurance-research.org/news/one-three-drivers-are-either-uninsured-or-underinsured-us-exposing-themselves-and-other ↩
- 2.California Legislative Information. “Insurance Code Section 11580.2.” https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS§ionNum=11580.2 ↩
- 3.California Legislative Information. “Senate Bill 1107 (2023-2024), Protect California Drivers Act.” https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB1107 ↩
- 4.California Legislative Information. “Insurance Code Section 11580.26.” https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=INS§ionNum=11580.26 ↩
- 5.Florida Senate. “Section 627.727, Florida Statutes.” https://www.flsenate.gov/Laws/Statutes/2025/627.727 ↩