Car Insurance / Types of Car Insurance / UI/UIM
Not everyone plays by the rules and a shocking number of people are uninsured.
Reviewed by: Max Cho, Licensed Insurance Broker NPN 20377411
Types of Car Insurance: Minimum Required Insurance / Liability Coverage / Uninsured Motorist / Collision / Comprehensive / PIP / MedPay
To make matters worse, state minimum insurance requirements are often egregiously low compared with the real costs of car crashes, so millions more are underinsured.
UI/UIM protects you (and your passengers) and your car if an uninsured or underinsured driver crashes into you. It also usually covers hit and run accidents.
Uninsured Motorist coverage pays your bills when someone else crashes into you and they don’t have insurance. In some states it also covers hit-and-runs — whether you’re driving your car or a pedestrian.
Underinsured Motorist coverage kicks in to pay your bills when a person who hits you has coverage, but not enough to cover your injuries or property damage.
There are two parts to UI/UIM coverage: Bodily Injury (UMBI) and Property Damage (UMPD).
UI/UIM is required in the following states: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire (if you have car insurance), New York, North Carolina, North Dakota, Oregon, Pennsylvania, South Carolina, South Dakota, Vermont, Virginia (if you have car insurance), Washington D.C., West Virginia, and Wisconsin.
The rules are different in each state:
The Insurance Information Institute says nearly one in eight drivers is uninsured, but it varies wildly by state.
In California more than 16% of drivers are uninsured. In Florida that number jumps to more than 20%. In Washington, almost 22% of drivers are uninsured. In Mississippi that number is almost 30%!
In places like California with very low minimum insurance requirements, many more drivers are underinsured. Imagine a scenario where you get in a crash and the person who caused the accident carries the minimum $5k limit for property damage. If you don’t have Underinsured Motorist coverage, you’re on the hook for the rest of the value of your car.
The alternatives to UI/UIM in this type of scenario are making a claim against collision coverage (which will make your premiums go up) or paying out of pocket.
Because this insurance is designed to protect you and your car, you should only pay for coverage you need to keep yourself out of financial trouble.
Both Uninsured and Underinsured Motorist coverages include Bodily Injury (UMBI) and Property Damage (UMPD) with coverage limits set separately, just like your regular liability insurance.
This gets tricky as different states have different rules. For example, in some states UMPD covers your car in hit-and-run accidents, while in others (California and Illinois) it doesn’t kick in if the driver is never identified. In some states UMPD also has a deductible, but it’s typically a lower amount, between $200 and $500.
UI/UIM isn’t terribly expensive, but more importantly it’s one of the better values in insurance. It’s cheaper than your regular liability insurance but you can elect the same amount of coverage. Here is a comparison of premium prices at various levels of liability coverage.
Car insurance premiums for liability coverage with and without UI/UIM
It’s shocking, but the coverage with UI/UIM costs less when your liability coverage is super high! As Coverage Cat founder Max Cho likes to say, “insurance prices are weird.
Coverage Cat has a unique database of hundreds of thousands of real auto insurance quotes derived from public data. We use this dataset and others to match Coverage Cat users with the best insurance for their needs.
All of our quote data assumes the driver is: single, college educated, has a clean driving record, and has been driving since 16 years old. Age, gender, location, and miles driven per day are variable. Our prices do not consider any discounts which might apply to you such as those for being a veteran, having multiple policies, loyalty, etc.
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