Glossary

Underinsured motorist coverage

Coverage that pays your injury costs when the at-fault driver has insurance, but not enough to cover what you are owed.

Also called: UIM, UIM coverage, underinsured motorist

Underinsured motorist coverage (UIM) protects you when the driver who hurts you is insured, but their bodily injury liability limits are too low to pay your full damages. It usually covers you, your household members and your passengers for medical bills, lost wages and pain and suffering, up to your UIM limit. It is often sold together with uninsured motorist coverage as UM/UIM.

States calculate UIM in two main ways. Under a limits-reduction, or set-off, approach, your UIM limit is reduced by what the other driver's insurer pays. Under an excess, or add-on, approach, UIM pays on top of the other driver's limit. Example: your damages are $120,000, the at-fault driver has $30,000 of coverage, and you carry $100,000 of UIM. With excess UIM, you could recover $30,000 plus $90,000. With set-off UIM, you would receive $30,000 plus $70,000, or $100,000 in total (hypothetical figures).

UIM matters because many drivers carry only state minimum limits, which can be far below the cost of a serious injury. Before settling with the at-fault driver's insurer, notify your own insurer, because settling without its consent can jeopardize your UIM claim. In some states you can stack UIM limits across vehicles. See uninsured and underinsured motorist coverage explained.

Last reviewed October 4, 2026

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Related terms

Uninsured motorist coverage Coverage that pays injury costs for you and your passengers when a driver with no insurance, or a hit-and-run driver, causes the crash. Stacking Combining uninsured or underinsured motorist limits across several vehicles or policies to raise the total available for one injury claim. Bodily injury liability The part of auto liability insurance that pays for injuries or deaths you cause to other people in a crash, plus your legal defense. Minimum coverage The least car insurance a state lets you carry to drive legally, usually liability coverage at set limits and sometimes PIP or uninsured motorist coverage. Release of liability A document an injured person signs to accept a settlement and give up further claims against the at-fault party for that accident.

Related guides

What to do after an accident with an uninsured driver Steps to take at the scene, which of your own coverages pay for your car and injuries, and your options for collecting from a driver with no insurance. How much liability coverage do you need? A practical method for choosing car insurance liability limits based on what you own, what you earn and what extra coverage actually costs you. Insurance Research Council studies on uninsured drivers and claims What the Insurance Research Council is, what its uninsured-motorist, injury-claim and litigation studies found, and how to read them as a driver. Mature driver course discounts Which states require a discount for drivers 55 and older who finish an approved course, how long it lasts, which courses count and how to claim it. Stacked vs unstacked uninsured motorist coverage Stacking lets you add uninsured motorist limits across your cars or policies. How it works, where it's allowed, what it costs, and how to decide. Uninsured drivers by state The share of uninsured drivers in every state and D.C. from Insurance Research Council 2023 estimates, how they are made, and how to protect yourself.