Updated July 2026
What Is Uninsured and Underinsured Motorist Coverage Insurance?
Uninsured motorist coverage (UM) pays when an at-fault driver has no insurance. Underinsured motorist coverage (UIM) pays when the at-fault driver's liability limits are too low to cover your damages. Both coverages step in after the other driver's insurance is exhausted or confirmed absent, covering medical bills, lost wages, vehicle repairs, and pain and suffering up to your policy limits. You file the claim with your own carrier, not the other driver's.
- You're rear-ended at a stoplight. The other driver is at fault but has no insurance. You have $18,000 in medical bills and $9,000 in vehicle damage. The at-fault driver has no assets. Your UM coverage pays the $18,000 in medical costs up to your UM bodily injury limit. Your collision coverage pays the $9,000 vehicle repair minus your deductible. Without UM, you'd sue the driver personally and likely collect nothing.
- You're T-boned by a driver who runs a red light. You have $45,000 in medical bills. The at-fault driver carries Vermont's minimum $25,000 bodily injury liability. Their carrier pays the $25,000 limit. Your UIM coverage pays the remaining $20,000 if your UIM limit is at least $45,000. Without UIM, you'd be responsible for the $20,000 gap.
Who Needs Uninsured and Underinsured Motorist Coverage Insurance?
You should carry UM/UIM if you live in a state where 10% or more drivers are uninsured, if you don't have health insurance that covers auto accident injuries, or if you carry liability-only coverage and can't afford to pay out of pocket for injuries caused by someone else. It's also critical if you have passengers regularly — UM covers their injuries when an uninsured driver is at fault.
Compare your UM/UIM limit to your health insurance deductible and out-of-pocket maximum. If an uninsured driver hits you and causes $30,000 in medical bills, will your health plan cover it, or will you owe the balance? If your health plan leaves you exposed, carry UM/UIM at least equal to your liability limit. If your health coverage is strong, you can skip UM bodily injury and keep only UMPD if your state offers it separately.
How Much Does Uninsured and Underinsured Motorist Coverage Insurance Cost?
Uninsured motorist coverage typically adds $8 to $18 per month to your premium, or $96 to $216 annually, depending on your coverage limits and state.
- Your UM/UIM coverage limits — higher limits cost more, but the incremental cost from $25,000 to $100,000 is often under $5 per month.
- Whether you select stacked or unstacked coverage in states that allow it — stacked UM multiplies your limit by the number of vehicles on your policy and costs 30% to 60% more.
- Your state's uninsured driver rate — states with higher percentages of uninsured drivers see higher UM premiums because claim frequency is higher.
- Your bodily injury liability limits — carriers often price UM as a percentage of your liability limit, so raising liability raises UM cost proportionally.
- Whether you add uninsured motorist property damage (UMPD) — this adds $3 to $8 per month and covers vehicle repairs when hit by an uninsured driver, replacing the need for collision coverage in some scenarios.