Is Uninsured/Underinsured Motorist coverage necessary?

With 14% of drivers in the United States not having insurance, purchasing an uninsured/underinsured motorist policy can protect you from major financial damage. In many no-fault car insurance states, uninsured motorist coverage is mandatory. Luckily, the deductible and rates for uninsured/underinsured motorist insurance coverage are much cheaper than liability and collision coverages.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jul 7, 2021

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Here's what you need to know...

  • Underinsured/uninsured motorists coverage protects you if you are in an accident with a driver who has no insurance
  • It is illegal in almost every state to operate a vehicle with insurance
  • Liability car insurance only covers your state’s minimum insurance requirement

Uninsured/underinsured motorist coverage (UM/UIM) is not a coverage talked about as much as liability, collision, or comprehensive, but it is equally important.

UM/UIM car insurance protects you when you’re in an accident with a driver who doesn’t have insurance or a driver who decides to hit and run.

Uninsured/underinsured motorist insurance covers both property damage and bodily injury, meaning the repairs on your car and your medical bills will both be reimbursed.

UM/UIM coverage is required in many states and even if it isn’t covered in yours, you might consider buying it, as it can save you money down the road.

Enter your ZIP code into our free quote comparison tool to compare car insurance coverages from different companies personalized for your insurance needs.

What are Uninsured/Underinsured Motorists?

Anyone who operates a vehicle without car insurance is considered an uninsured motorist. Underinsured drivers are those who cause accidents that exceed their level of insurance coverage.

When you purchase underinsured motorist insurance, your insurance company pays the difference between the accident damages and the amount of the at-fault driver’s insurance.

The following table shows just how important having uninsured/underinsured motorist coverage is.

Worst (and Best) States for Uninsured Motorists
RankState% of Uninsured Motorists
1Mississippi29.4
2Michigan25.5
3Tennessee23.7
4New Mexico21.8
5Washington21.7
6Florida20.4
7Alabama19.5
8Arkansas19.3
9California16.6
10Rhode Island16.5
11Missouri16.4
12Colorado16.3
13Alaska16.1
14Indiana15.8
15Maryland14.1
16Kentucky13.9
17Oklahoma13.4
18Wisconsin13.3
19Idaho13.2
20Ohio13.0
20North Dakota13.0
22Georgia12.4
23Illinois11.8
23Arizona11.8
25Louisiana11.7
26Iowa11.3
27South Carolina10.9
27Kansas10.9
29Oregon10.7
30Virginia10.5
31Nevada10.4
32Minnesota9.9
33Hawaii9.3
33Nebraska9.3
35West Virginia9.2
36Vermont8.8
37Delaware8.5
37Montana8.5
39Texas8.3
40North Carolina7.4
40South Dakota7.4
42Utah6.5
43Connecticut6.3
44New Hampshire6.1
45Pennsylvania6.0
46Wyoming5.8
47Maine4.9
48New York4.1
49Massachusetts3.5
50New Jersey3.1
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Our study covering facts about uninsured motorists found there are 14 states where over 15% of drivers don’t have insurance. In fact, at least 10% of drivers are uninsured in most states. Therefore, your odds of getting in an accident with an uninsured driver are probably higher than you think.

This underscores how important it is to have uninsured/underinsured motorist coverage in case of these situations. But you might wonder how expensive it is. Let’s move to the next section and find out.

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Is uninsured/underinsured motorist insurance expensive?

Uninsured motorists / underinsured motorists coverage is much cheaper than other forms of car insurance such as liability, collision, comprehensive, and luxury car insurance.

The industry average for uninsured/underinsured motorists coverage is about 10% of a driver’s total premium.

Careful analysis of your location and financial situation can help determine if uninsured/underinsured motorist coverage is right for you. The percentage of uninsured drivers in your state is one factor to consider.

Since uninsured/underinsured motorist coverage is protection against bodily injury, you will want to look at health insurance coverage to see the extent of existing protection.

There are also a number of ways to keep your car insurance rates low, including having a good driving record and asking your insurance company for discounts.

Is uninsured/underinsured motorist insurance worth it?

Uninsured/underinsured motorist coverage is an add-on that can be applied to either a liability or a comprehensive auto insurance policy. The price that you pay for uninsured and underinsured motorists coverage varies according to the amount that you buy.

Even if you select a liability car insurance policy that only covers the state minimum, you can still get uninsured and underinsured motorist protection at a good rate.

Another option for motorists that want to buy the maximum amount of uninsured/underinsured motorist coverage is an option known as stacking.

Stacking is done by combining the amount of coverage that you have on all of your vehicles and applying it to one car if you get into a collision.

Uninsured/underinsured motorist coverage can save you a great deal of money in the future if you’re a victim in an accident involving an uninsured motorist. You may worry about the extra cost but, the truth is, there are many ways to save on car insurance.

The easiest and quickest way is to compare live car insurance quotes from different companies. Plug your ZIP code into our free quote tool to do just that and start saving today.

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