Uninsured and Underinsured Motorist Coverage Explained
Last reviewed June 2026
Quick answer. Uninsured motorist (UM) coverage pays when the at-fault driver has no insurance. Underinsured motorist (UIM) coverage pays the gap when they have insurance but not enough. Both come from your own policy and are often the difference between a full recovery and a shortfall after a serious crash.
These two coverages are the safety net for the most common problem after a serious crash: the at-fault driver cannot pay for the harm they caused.
Uninsured motorist (UM) coverage. Pays for your injuries when the at-fault driver has no liability insurance, or in a hit-and-run, as if it were that driver’s policy, up to your UM limit.
Underinsured motorist (UIM) coverage. Pays the difference when the at-fault driver has insurance but their limit is less than your damages, up to your UIM limit.
Why Minimum Limits Often Are Not Enough
A serious injury can generate medical bills that dwarf a minimum liability limit. New Jersey’s 2026 minimum of 35,000 dollars per person, for example, can be exhausted before treatment is even finished. Robust UM/UIM coverage on your own policy bridges that gap.
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Frequently Asked Questions
What Is the Difference Between Uninsured and Underinsured Motorist Coverage?
Uninsured motorist (UM) coverage applies when the at-fault driver has no insurance. Underinsured motorist (UIM) coverage applies when they have insurance but not enough to cover your damages. Both pay from your own policy, up to your limits.
Do I Need This Coverage If I Already Have Health Insurance?
They serve different purposes. Health insurance pays medical bills but not pain and suffering, lost wages beyond limits, or other damages. UM/UIM steps in where the at-fault driver cannot pay, which health insurance does not address.
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