Underinsured Motorist Coverage (UIM)
What Is Underinsured Motorist Coverage?
Underinsured motorist coverage (UIM) is an auto insurance feature that helps pay for damages when the at-fault driver has insurance but not enough to fully cover the costs of an accident.
This coverage protects drivers from financial losses caused by insufficient insurance coverage.
Why It Matters
Serious accidents can result in high medical bills, vehicle repairs, and lost income. If the at-fault driver’s insurance policy has low coverage limits, those limits may not cover the full damages.
UIM coverage helps bridge the gap.
How Underinsured Motorist Coverage Works
If an at-fault driver’s insurance covers only part of the damages, UIM coverage may help cover the remaining costs up to the policyholder’s limits.
Common covered costs include:
- medical expenses
- lost wages
- additional accident-related expenses
The insurer pays the difference between the at-fault driver’s coverage and the policyholder’s damages.
Example
If an accident causes $80,000 in damages but the at-fault driver’s insurance covers only $30,000, underinsured motorist coverage may help pay the remaining costs up to the policy limit.
Underinsured Motorist Coverage vs Uninsured Motorist Coverage
- Underinsured motorist coverage applies when the at-fault driver has insufficient insurance.
- Uninsured motorist coverage applies when the driver has no insurance.
FAQs About Underinsured Motorist Coverage
Is underinsured motorist coverage required?
Requirements vary by state.
Does UIM cover medical expenses?
Yes. It often helps cover injury-related costs.
Can UIM cover vehicle damage?
Some policies include property damage coverage.
Related Terms
