Uninsured motorist (UM) coverage provides coverage for the insured who is hit by a motorist who is uninsured or by a hit-and-run driver who remains unidentified. Since the injured party cannot get money for their injuries from the driver of the liable vehicle, uninsured motorist coverage picks up the bill. UM coverage is required in many states as part of a driver’s liability coverage.
UM coverage pays for the driver or a relative who lives with the driver, or anyone else driving a named vehicle with a driver’s permission, or anyone else riding with the driver in the named vehicle. UM coverage also covers the insured if they are passengers in someone else’s car, although the passenger’s UM insurance will not contribute until the driver’s UM insurance is exhausted. For a hit-and-run, a driver is usually required to notify the police within 24-hours of the accident to receive the benefits of UM coverage.
Underinsured motorist (UIM) coverage operates in a similar fashion. With UIM coverage, the liability policy of the driver at fault is not enough to cover the injuries of the other driver or passengers. UIM coverage pays out the difference for the non-liable driver.
Generally speaking, UM or UIM coverage pays for only medical injury to the driver and passengers of the hit car. For a higher premium, it can cover property damage to the automobile as well. UM and UIM coverage is reduced by amounts the driver receives from other insurance coverage such as personal medical insurance or worker’s compensation.