Underinsured vs. uninsured motorist

You never expect it to happen — maybe someone backs into your car in the parking lot or sideswipes you while changing lanes. Then you find out the driver doesn’t have enough insurance, or any insurance at all. Though you’ve followed safe driving rules and have the right coverage in place, there are people on the road without proper protection who can still leave you at risk.

That’s where underinsured and uninsured motorist insurance come in. These coverages are designed to help keep you, your loved ones and your wallet protected when the unexpected happens.

Let’s dive a little deeper to see how these coverages work.

What does underinsured motorist insurance cover?

Here’s the deal — not everyone on the road carries enough insurance to cover the cost of an accident. While a driver may have the minimum amount of liability insurance required by their state, it might not be enough to pay for your injuries and other accident-related costs if they cause a crash.

With underinsured motorist coverage you, your household members, and your passengers have protection if you’re hit by a driver who has some insurance, but their limits are not high enough to fully cover your expenses.

So, let’s say you’re in an accident caused by an underinsured driver. Their insurance could help pay for injuries up to their policy limit — then your underinsured motorist coverage may step in to help cover the rest, up to your policy limits. If you don’t have this coverage, you might be left paying some expenses out-of-pocket, even if you’re not at fault.

Example: You have $40,000 in medical bills after an accident. The at-fault driver’s insurance only covers $25,000. Because you have a $100,000 limit on your underinsured motorist coverage, your policy may help cover the remaining $15,000.

What does uninsured motorist insurance cover?

Uninsured motorist coverage is similar to underinsured motorist coverage, but it applies if you’re hit by a driver with zero car insurance. While most states require a minimum level of coverage, not everyone follows the rules.

If you’re in an accident with an uninsured driver, they won’t likely be able to pay for your injuries or damages. Uninsured motorist coverage helps ensure you’re not left with the bill for an accident you didn’t cause. It may also help financially protect you, the insured members of your household, and your passengers if you’re injured in a hit-and-run accident.

Take a look at our tips for handling an accident with an uninsured driver.

You may also hear about uninsured motorist property damage liability coverage, which can help pay for repairs to your vehicle if the at-fault driver has no insurance. This coverage isn’t available in every state and is usually optional.

Do I need underinsured or uninsured motorist coverage?

Whether you’re required to have these coverages depends on your state. Some states make them mandatory, while others offer them as optional add-ons. No matter where you live, having this protection can give you peace of mind knowing you’re prepared if you’re hit by another driver who isn’t.

Underinsured and uninsured motorist coverages are important parts of a well-rounded insurance package. If you want to learn more about what’s required or available in your state, your American Family Insurance agent is here to help you make confident choices for the road ahead.

This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal or financial advice. You should contact a professional for advice specific to your situation.

This information represents only a brief description of coverages, is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Exclusions may apply to policies, endorsements, or riders. Coverage may vary by state and may be subject to change. Some products are not available in every state. Please read your policy and contact your agent for assistance.