Underinsured Motorist Coverage: How Much and Do You Need it?

Most states have minimum requirements for liability coverage. Often set at $25,000 per person and $50,000 per accident, this type of insurance covers you when you are at-fault in an accident and cause damage to the driver and their property.

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If the other driver is at fault, their liability insurance will cover you. Tit-for-tat, all is well. But what happens if you’re hit by a driver who doesn’t have enough insurance to cover the costs of your medical expenses and property damage?

That’s where underinsured motorist coverage comes in. Often bundled with uninsured motorist coverage and required in a handful of states, this insurance provides some cover against the growing number of uninsured and underinsured drivers on US roads.

How Common are Uninsured and Underinsured Drivers?

It has been estimated that there are between 1 in 7 and 1 in 8 uninsured drivers on American roads. This is a huge number when compared to many other developed nations, and it’s even bigger in states like Florida, where an estimated 25% of drivers don’t have adequate car insurance.

If you’re involved in a car accident that is not your fault, and the other driver doesn’t have adequate cover, you could be left to foot the bill. If you have uninsured/underinsured motorist cover, however, it will step in and assume the role typically played by property damage liability and bodily injury liability insurance.

You choose the type that you buy and the extent of the limits. In that sense, it also works just like the aforementioned liability insurance.

There are two types of cover:

  • Underinsured/Uninsured Motorist Bodily Injury Coverage: Also known as UMBI, this is provided on a per person and per accident basis, much like bodily injury liability insurance.
  • Underinsured/Uninsured Motorist Property Damage Coverage: Also known as UMPD, this is offered on a per accident basis.

Uninsured/Underinsured Motorist Coverage

You can add underinsured/uninsured driver cover to your insurance policy in most states. It’s optional, along with coverage options like collision coverage, comprehensive coverage, and medical payments.

In some states, however, it’s mandatory, and you will be considered underinsured yourself if you don’t have all the necessary cover.

  • Connecticut: $20,000 Per Person; $40,000 Per Accident. Both underinsured and uninsured.
  • D.C: $25,000 Per Person; $50,000 Per Accident. Only uninsured coverage required.
  • Illinois: $20,000 Per Person; $40,000 Per Accident. Only uninsured coverage required.
  • Kansas: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • Maine: $50,000 Per Person; $100,000 Per Accident. Both underinsured and uninsured.
  • Maryland: $30,000 Per Person; $60,000 Per Accident. Both underinsured and uninsured.
  • Massachusetts: $20,000 Per Person; $40,000 Per Accident. Only uninsured coverage required.
  • Minnesota: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • Missouri: $25,000 Per Person; $50,000 Per Accident. Only uninsured coverage required.
  • Nebraska: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • New Hampshire: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • New Jersey: $15,000 Per Person; $30,000 Per Accident. Both underinsured and uninsured.
  • New York: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • North Carolina: $30,000 Per Person; $60,000 Per Accident. Both underinsured and uninsured.
  • North Dakota: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • Oregon: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • South Carolina: $25,000 Per Person; $50,000 Per Accident. Only uninsured coverage required.
  • South Dakota: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • Vermont: $50,000 Per Person; $100,000 Per Accident. Both underinsured and uninsured.
  • Virginia: $25,000 Per Person; $50,000 Per Accident. Both underinsured and uninsured.
  • West Virginia: $20,000 Per Person; $40,000 Per Accident. Only uninsured coverage required.
  • Wisconsin: $25,000 Per Person; $50,000 Per Accident. Only uninsured coverage required.

How Much is Underinsured and Uninsured Motorist Insurance?

As with all other types of coverage, the amount you pay for underinsured/uninsured motorist insurance varies by state, driver, and insurance company. Generally, it costs around half of what you pay for liability insurance, assuming you pay for the same amount of cover.

The insurance company will consider what type of driver you are, how many claims you have had, and where you live. All of these factors will impact your rates.

You can bring the total price of your auto insurance policy down by trying the following:

  • Improve your credit score.
  • Pass a defensive driving course.
  • Achieve and maintain good grades.
  • Use multi-car or multi-policy discounts where possible.
  • Join membership clubs for discounts.
  • Make sure your car has anti-theft devices and safety features.
  • Pay for your premiums upfront.
  • Sign up for paperless and Auto-pay discounts.
  • Check low-mileage programs and good driver programs.
  • Maintain a safe driving record.

Bottom Line: Do You Need Underinsured Motorist Coverage?

If your state requires it, you don’t have a choice: you need uninsured/underinsured cover on your car insurance policy. But what happens if your state doesn’t require it, at what point should you start considering these insurance products?

  • Your State Has a Lot of Uninsured Drivers: The more of these drivers there are in your area, the greater your risk is and the more important UMBI and UMPD coverage options are.
  • You Have an Expensive Car: If you drive a luxury, high-price vehicle and your state has very low liability requirements, you should consider underinsured motorist coverage. Without it, you could be seriously out of pocket if you’re involved in an accident, even if the other driver was at fault.
  • You Want Extra Protection: With underinsured/uninsured motorist insurance, you will also be covered for a hit-and-run, even if you are a pedestrian. The extra cover provided by these options will ensure you’re prepared for more eventualities and give you some much-needed peace of mind at the same time.
  • Good Price: Last but not least, if this insurance coverage can benefit you in any way and you can get it for a good price, why not add it to your policy? It will seem like a genius move in the event of an accident with an uninsured/underinsured driver, making all those extra cents worthwhile.