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Definition
Underinsured Motorist Coverage is auto insurance that pays for your injuries and damages when an at-fault driver's liability limits are too low to fully cover what you're owed. It steps in to fill the gap between the other driver's coverage and your actual losses, up to your policy limit. This protection is frequently bundled with uninsured motorist coverage and sold together as UM/UIM. For example, if another driver causes a serious crash but carries minimal liability limits, your underinsured motorist coverage can help cover the remaining medical bills and other damages. Availability, limits, and how the coverage stacks or coordinates with the at-fault driver's policy vary by state and by insurer. Because requirements and triggers differ, review your declarations page or ask your agent to confirm exactly how much you carry and when it applies.
Also Known As
UIM coverage
UM/UIM
Underinsured Motorist Bodily Injury
Gap liability coverage
Used in Context
- After a crash, the other driver's low liability limits left $30,000 in unpaid medical bills, so the victim filed an underinsured motorist claim under their own policy.
- A Dreamy Leads insurance shopper asked whether adding underinsured motorist coverage was worth it given how many drivers carry only the state minimum.
- Because the at-fault driver was underinsured, the family relied on their own UIM coverage to cover the difference.
What's the difference between uninsured and underinsured coverage?
Uninsured motorist coverage applies when the at-fault driver has no insurance at all. Underinsured motorist coverage applies when that driver has insurance, but their liability limits are too low to cover your damages. They're often sold together as UM/UIM and address related but distinct gaps.
Do I need underinsured motorist coverage if I have health insurance?
It can still help. Health insurance may cover some medical bills, but underinsured motorist coverage can address the gap an at-fault driver's low limits leave behind, including losses your health plan won't pay. Whether it's required or available varies by state, so check your policy.
When does underinsured motorist coverage pay out?
It typically pays when an at-fault driver's liability limits aren't enough to cover your damages, filling the gap up to your policy limit. The exact trigger and how it coordinates with the other driver's coverage vary by state and insurer, so confirm the details with your agent.
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