The Basics of Auto Insurance Coverage: Uninsured Motorist Vs. Underinsured Motorist

There is a lot of confusion regarding the difference between Uninsured Motorist Coverage (UM Coverage) and Underinsured Motorist Coverage (UIM Coverage).   You pay premiums for both UM and UIM coverage to your own automobile insurance company to protect you if you are injured in an accident and the tortfeasor (individual who caused the injury) does not have adequate insurance to compensate you for your injuries.

UM Coverage applies in two separate circumstances. First, it applies where the tortfeasor does not have any insurance coverage and, accordingly, is Uninsured. Secondly, it applies where the tortfeasor cannot be identified (e.g.: a hit and run accident).  In a hit-and-run accident where the tortfeasor cannot be identified, the hit-and-run vehicle is known as a “phantom vehicle”.  In either of these situations, if you are injured in an accident and have UM coverage, you can recover for your damages from your own insurance carrier.

UIM coverage, in contrast, applies where the tortfeasor who caused the accident has insurance, but the tortfeasor’s insurance is inadequate to compensate you for your damages.  For example, if the tortfeasor only has $15,000 in liability coverage limits and your damages far exceed those coverage limits, if you have UIM coverage on your auto policy you can recover for your damages from your own insurance carrier.

There are countless intricacies to UM/UIM law and the above is a mere overview of the very basics.