Uninsured and underinsured motorist coverage: how it works after a crash

Uninsured motorist (UM) coverage pays you when the driver who caused a crash has no insurance. Underinsured motorist (UIM) coverage pays when that driver has insurance, but not enough to cover your loss. The National Association of Insurance Commissioners (NAIC) describes UM as reimbursing you if an uninsured or hit-and-run driver hits you, and UIM as paying when an at-fault driver “doesn’t have enough insurance to fully pay for your loss” (NAIC consumer auto guide). Both are part of your own policy, so the claim goes to your own insurer.

What UM and UIM coverage pay for

What the coverage pays for depends on your state and your policy. In Texas, the statute defines this coverage as protecting insureds who are legally entitled to recover damages from uninsured or underinsured drivers for bodily injury, sickness, disease or death, or property damage (Tex. Ins. Code § 1952.101). The Texas Department of Insurance (TDI) says that if your policy has this coverage, it will pay for your car repairs, a rental car, and pain and suffering (TDI: what to do after a wreck). In Texas, the property damage part of this coverage is offered subject to a $250 deductible.

Other states draw the line elsewhere. Pennsylvania’s insurance department, for example, says UM and UIM coverage in that state cover you, resident relatives and passengers for injuries, and do not cover damage to property (Pennsylvania Insurance Department auto guide). Read your own declarations page and coverage form.

Uninsured, underinsured and hit-and-run drivers

Uninsured. The at-fault driver has no liability coverage. In Texas, an uninsured motor vehicle also includes an insured vehicle whose insurer cannot pay because it is insolvent. Texas puts the burden of proof on the insurer in a dispute over whether a vehicle was uninsured (Tex. Ins. Code §§ 1952.102, 1952.109).

Underinsured. The at-fault driver has collectible liability coverage, but its limits are lower than the UIM limit on your policy, or have been reduced below it by other payments from the same accident. Texas UIM coverage pays what you are legally entitled to recover, up to your policy limit, reduced by the amount you recovered or could recover from the other driver’s insurer (Tex. Ins. Code §§ 1952.103, 1952.106).

Hit-and-run. Whether UM coverage applies when the other driver is unknown depends on state law and the policy. In Texas, the policy must require actual physical contact between the unknown driver’s vehicle and you or your property (Tex. Ins. Code § 1952.104). TDI adds that UM coverage “won’t pay for a hit-and-run accident if you didn’t report it to police” (TDI auto insurance guide).

You claim against your own insurer

A UM or UIM claim is made under your own policy, not against the other driver’s insurer. That changes who you deal with, but not what has to be shown. In Texas, the coverage pays amounts you are legally entitled to recover from the other driver, so the other driver’s fault and the size of your damages still matter. If your own share of fault is in play, your state’s fault rule applies, as our comparative negligence guide explains.

That is why these claims can become adversarial. Your insurer owes you the benefits of the policy, but because the coverage turns on what you could recover from the other driver, the two of you can end up disagreeing about fault and the amount of your damages. After paying, a Texas insurer is entitled to recover, to the extent of its payment, from any settlement or judgment against the person responsible (Tex. Ins. Code § 1952.108). Our guide on insurance subrogation covers that right in general. A Texas lawsuit against the insurer over this coverage may be brought only in the county where the policyholder lived at the time of the accident or where the accident happened.

If a claim stalls or is denied, the steps in our insurance disputes guide apply. TDI handles complaints about Texas auto insurers, but says it cannot make a company pay a claim unless not paying violates a law or the policy, and cannot decide who was at fault (TDI: auto insurance complaints). When the problem is how the insurer handled the claim, see our guide to insurance bad faith.

Must insurers offer it, and how do you reject it?

States differ. The NAIC lists UM and UIM coverage as required by law in some states. In Texas, an insurer may not issue an auto liability policy unless it provides UM/UIM coverage, and the coverage does not apply “if any insured named in the insurance policy rejects the coverage in writing” (Tex. Ins. Code § 1952.101). Once rejected, a Texas insurer generally does not have to add it back on renewal unless the named insured asks in writing. TDI’s guide says the same in plain terms: insurers must offer the coverage, and if you don’t want it, you must tell the company in writing (TDI auto insurance guide).

Texas also ties the limits to your liability coverage. UM/UIM bodily injury and property damage limits must be offered in the amounts you want, but not above your own liability limits, and not below the state minimums.

Stacking, where a state provides for it

Stacking means adding together UM limits across vehicles or policies. Florida’s Department of Financial Services says Florida law requires an insurer to stack UM coverage unless the coverage is rejected in writing, and that choosing non-stacked coverage requires a rejection form (Florida DFS auto overview). Pennsylvania’s insurance department says that when you stack (Pennsylvania auto guide), your limit for each covered vehicle is multiplied by the number of vehicles on the policy, and that in Pennsylvania stacked coverage applies unless you reject it. Rules in other states differ, and this guide does not survey them.

After a crash with an uninsured or underinsured driver

• Call the police when needed. In Texas, an unreported hit-and-run may not be covered.
• Get the other driver’s details. Note their name, vehicle and insurance information, if any.
• Collect evidence. Keep photos, witness names, the police report and medical records and bills.
• Check your declarations page. Confirm whether you have UM/UIM coverage and what the limits are.
• Notify your own insurer. Report the claim under your policy and keep a dated record of every contact.
• Find any written rejection. If the insurer says you declined the coverage, ask for the signed form.

This guide is general legal information, not legal advice. UM and UIM rules differ by state and depend on the facts and the policy; consult a lawyer licensed in the relevant jurisdiction about a specific claim.