Underinsured Motorist Coverage (UIM)
Underinsured motorist (UIM) coverage pays for your injuries when an at-fault driver does have liability insurance, but their limits are too low to cover what they owe you. It picks up the gap between the other driver's coverage and your actual losses, up to the UIM limit you buy.
Say another driver with a 25/50/25 policy causes $60,000 of injuries to you. Their insurer pays their $25,000 per-person limit, and your UIM coverage can pay the remaining $35,000 up to your own UIM limit. UIM is almost always sold alongside uninsured motorist (UM) coverage, and the pair is often written together as "UM/UIM."
Underinsured (UIM) vs. uninsured (UM)
The difference is whether the at-fault driver had insurance at all. Uninsured motorist coverage applies when they had no liability insurance (or fled the scene). Underinsured motorist coverage applies when they had insurance but not enough — their limits were lower than your losses. Because so many drivers carry only their state-minimum split limits, UIM is what stands between a serious injury and an unpaid medical bill. Some states require UM/UIM; others make it optional but require insurers to offer it in writing.
A real example of a UIM shortfall
A driver merges into you on the highway and is found at fault, leaving you with $180,000 in medical bills and lost wages — but their policy carries only a 50/100/25 limit. Their insurer pays its $50,000 per-person maximum and stops, leaving you $130,000 short for an injury you did not cause. If you carry $250,000 of UIM, it covers that $130,000 gap. Without it, you would be pursuing an underinsured stranger, or leaning on your own health plan, for a six-figure balance.
Why UIM is worth more than it costs
The math behind UIM is stark: a large share of drivers carry only the state minimum, so whoever injures you is statistically likely to be underinsured for a serious crash — and their limit, not your losses, is what their policy pays. UIM converts that risk into a number you control. It is typically inexpensive because it pays only in that specific gap, which makes raising your UIM limit one of the highest-return dollars on a policy for anyone who could face large medical bills.
Frequently asked questions
What is the difference between UM and UIM?
Uninsured motorist (UM) coverage applies when the at-fault driver had no insurance; underinsured motorist (UIM) coverage applies when they had insurance but their limits were too low to cover your losses.
Do I need UIM if I have health insurance?
UIM covers more than medical bills — it can pay for lost wages, pain and suffering, and costs your health plan will not, and it has no health-insurance network or copay. Many drivers carry it even with good health coverage.
Is underinsured motorist coverage required?
It depends on your state. Some require UM/UIM, others require insurers to offer it and let you reject it in writing. Your state requirements page shows which rule applies.
