What is UM/UIM Coverage & Why it Could Cost You?

UM/UIM Coverage


Often overlooked and misunderstood,  UM/UIM coverage (uninsured underinsured motorists) will vary slightly by state but the underlying concept is generally the same.  Coverage may consist of 3 parts :

  • UM or UMBI –  related to medical bills, lost income and pain and suffering when the other driver is at fault and had no insurance coverage in place at the time of the accident. (Think No Insurance)
  • UIM – related to medical bills, lost income and pain and suffering when the other driver is at fault but lacks adequate liability limits to cover your expenses. (Think Not Enough Insurance – people)
  • UMPD – pays for damages to your vehicle when it is hit by an uninsured driver, hit-and-run driver, or an insured driver with property damage limits that are too low to pay for the property damage incurred. (Think Not Enough Insurance – vehicles and property).

UM/UIM Coverage is important and protects you, your family and passengers of your vehicle if you are hit and/or injured by an at fault driver with no coverage or not enough protection to pay for the loss.  Keep this thought in mind to remember this coverage  When you see the “U” (in the coverage name) think “You” because that’s who is protected here. 

It also provides protection for resident relatives (family members who reside with you unless they have their own coverage) when they are passengers in another auto that you or they do not own and that vehicle is involved in an accident where the at fault party has no insurance coverage or carries lower limits of coverage than you and the vehicle that they were occupying also carries lower limits of protection than you.

Wow, that’s a mouthful! 

What I’m trying to  say is your limit of protection follows you and your family when in other vehicles on an excess basis; meaning that you can collect up to your own limit of protection from your policy if the coverage available is inadequate to pay for your damages.



According to the Insurance Research Council (IRC) , nearly 13% of drivers were uninsured in 2014.  That suggests that one in every eight vehicles on the road have no insurance coverage at all.  Add to that a very conservative estimate of 15% of all drivers carrying compulsory required limits and you begin to see why UM/UIM Coverage becomes an important element of your family’s financial security.  If 28% of drivers have very low limits or coverage or no coverage at all, we’re are all exposed to considerable risk while on the highway.


  • Won’t my health insurance cover me?  Health insurance will often pick up the costs of necessary medical procedures.  Problems can surface when relying on this approach.  Keep in mind that most health insurance plans are subject to deductibles, co-pays and annual out of packet maximums.  Many plans have limitations or restrictions for procedures that may be deemed elective surgeries.  A very big gap is that health insurance will not pay for pain and suffering.  Then there’s the medial liens that the health insurer will likely file to protect their interest.  The bottom line is that health insurance alone may not get the job done.
  • Do your children ever ride in somebody else’s car?  The answer to this one is most often a universal yes for all parents.  There’s the friends, neighbors and activities or sporting events.  Whether we like it or not, our kids are often in vehicles that are not ours.  Yes, we give little consideration to the UM/UIM Coverage that may be on that vehicle.  It’s not exactly the best conversation starter with the parents of your child’s friend.  The only way to make sure that your family is properly protected is to make sure that the coverage on your auto policy is adequate.
  • Is this coverage expensive?  Sure there’s a premium associated with this coverage, but it really isn’t that expensive when we consider the protection provided.  The most expensive approach is to have inadequate coverage if something were to occur.  After all, where will the money come from?   I often find that many families are carrying  far too low a limit in this area.  Improving the level of coverage is often less than a couple hundred dollars a year.  That’s nothing compared to the cost of significant injury and rehabilitation.
  • What about carrying lower limits of UM/UIM than Bodily Injury? –  It seems as if every month I come across a couple cases where people are carrying lower limits of UM/UIM than they have for liability.  While it is perfectly legal to waive increased limits of uninsured motorist coverage above state required levels of coverage, it can leave your family exposed all in the name of affordability.  Here’s the question that I always ask… Why would you chose a higher level of protection for total strangers than you provide for your own family?”

UM/UIM coverage protects you and the people that you care about most.  Having the right insurance coverage is part of a solid financial plan.  Life can change in an instant,  Trust me I’ve personally lived it.

Get with a trusted professional agent and have your coverage reviewed.  Your family’s financial future might just depend on it!

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