Underinsured Motorist Coverage Explained

Underinsured motorist coverage pays when an at-fault driver doesn’t have enough insurance to cover the damage they've caused.
Sarah SchlichterAug 26, 2021

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If you’re in a car accident and another driver is at fault, their auto insurance will generally cover your medical bills and repair costs. But what if the driver doesn’t have enough insurance to pay all your expenses? That’s where underinsured motorist coverage can help.

Underinsured motorist coverage is the section of your car insurance policy that pays out if the driver responsible for an accident doesn’t have sufficient insurance to cover your injuries or vehicle damage.

It’s often sold along with , which is similar but pays out when the at-fault driver doesn’t have any insurance.

Underinsured motorist coverage is required in almost a dozen states and optional in many others.


Underinsured motorists are drivers who have , just not enough to pay for all of the damage they’ve caused. Liability insurance is the part of an auto policy that pays for vehicle repairs and injuries to others after a crash you’re responsible for. If an at-fault driver doesn’t have enough liability coverage, other injured drivers and passengers may end up footing the rest of the bills.

Underinsured motorist coverage prevents that by paying the difference between the at-fault driver’s policy limit and the total cost of the damage they caused.

This coverage can be particularly useful if you’re hit by someone with . In some states, minimum liability limits for bodily injury are as low as $15,000; medical bills after a bad accident could easily exceed that amount.

There are two types of underinsured motorist coverage:

Underinsured motorist coverage is required in nine states. In two others, New Hampshire and Virginia, car insurance isn’t mandatory — but if you do buy it, you must include both underinsured motorist bodily injury and property damage in your policy.

Use the table below to see the minimum amount of underinsured motorist coverage you need to purchase in your state.

Underinsured motorist coverage generally costs less than other types of car insurance. As with most types of insurance, if you increase coverage limits, you'll pay more.

Drivers often choose to set their uninsured and underinsured motorist limits at the same level as their liability limits. All three types of coverage are designed to protect your financial assets from the expenses of a car accident, so the higher your , the higher you may want these limits to be.


Some states and insurance companies allow you to “stack” your underinsured motorist bodily injury coverage, which means combining your limits for multiple vehicles to increase your overall limit. Doing this will typically raise your premium.

Imagine you have two vehicles on the same policy, each with $25,000 worth of underinsured motorist coverage. If you have stacked coverage and you’re in an accident with an underinsured driver, you’d have a total of $50,000 in coverage for medical bills beyond what the other driver’s insurance will pay.

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