What Does Underinsured Motorist Coverage Cover?

June 25, 2013

How does underinsured motorist coverage differ from uninsured motorist coverage? Find out the terms tips to get the best rates.

Underinsured motorist coverage is different than uninsured motorist coverage. The former (underinsured) is intended to cover any shortfall if an injured person suffers more damage than is covered by the driver's insurance. Nearly 20 percent of drivers are not driving with enough insurance, or have no insurance at all. Some can get away with it, but those who are in an accident will not. The worst part is that you will be the one who has to foot the bill if you are involved in an accident with someone without enough insurance.

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For example, a driver that injures you has coverage for $30,000 but there is $60,000 in damages. Underinsured motorist coverage, from your own policy, can help cover this gap. Damages can include lost wages, medical costs, rental car reimbursement, property damages, pain and suffering, emotional duress and even future wage earnings, if your career is negatively impacted because of the accident. If the damages are greater than the driver's policy, but less than your coverage, you will receive the full amount if your claim is successful. Damages that exceed your coverage will be limited to what your policy allows. For example, if you have an additional $40,000 in damages but your policy only covers $30,000 you will only get $30,000.

Uninsured motorist coverage

Uninsured motorist coverage is different and helps to protect you in the event that the person who hit you doesn't have auto insurance. Some states (such as Minnesota) require all drivers to carry uninsured motorist insurance. In such cases, you are able to make a claim to your insurance company and they in turn pay you if the other driver doesn't have insurance. Uninsured motorist coverage can also cover you if you are hit by a stolen car, or by a person who does a "hit and run."

In most cases, underinsured and uninsured motorist coverage will not apply to your passengers if you are at fault in the accident. In such cases passengers will file a claim against your insurance company. If you are at fault but the damages exceed your coverage, they will be forced to take you to court for the difference.

Regulations on underinsured motorist coverage vary from state to state, and some states may require that a claim be filed through the court system, depending on the amount of money a driver is attempting to claim. In some cases, you can claim up to a certain amount without legal proceedings. Some states have a "difference of limits" that allows you to claim only up to a certain amount of money. Victims that are required to settle matters in court are always advised to consult a lawyer to learn exactly what they can expect during the proceedings.

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For the most part these two forms of insurance are tied together in many policies. While you may have the option to get one or the other, most likely you will be getting coverage for both at the same time. In addition, there is something called uninsured property coverage. Uninsured property coverage is generally for people that don't carry collision coverage but want to protect their vehicle from uninsured drivers.

Underinsured and uninsured motorist coverage will protect drivers from a wide variety of incidents but it will benefit the driver most when used in conjunction with collision coverage. Carrying insurance is always a good idea and it is best to protect yourself in case you are ever involved in an accident and the other driver hasn't done the same.

Finding the Best Underinsured Motorist Coverage Rates

If you are considering underinsured motorist insurance, you'll want to compare quotes to find the best rates possible. Insurance providers such as State Farm, Nationwide and Progressive may help cover you if you are involved in a collision with an underinsured motorist.

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State Farm

State Farm has been a provider of auto, life and fire insurance since 1922. The State Farm Insurance website has a convenient online quote request feature, so you can get an instant price estimate by filling out a form online. You are under no obligation to purchase insurance from State Farm by filling out a quote request form.


Nationwide began as a small Ohio based auto insurance company in 1925, and changed its name to Nationwide in 1955. Like State Farm, it has an obligation free online quote request feature so you can collect another quote to compare in a matter of minutes.


Progressive was founded in 1937 and since then has been offering competitive prices on auto and home insurance. Like the other sites mentioned, you can get a quick quote on insurance rates by filling out an online form.


GEICO was founded in 1936 and has some of the most memorable insurance commercials around. GEICO stands for Government Employees Insurance Company. it was originally started to offer insurance to government employees and members of the military. A quick and obligation-free online insurance quote feature is available.


Esurance began as an online car insurance company in 1999 and survived where many other online providers did not. A purely online company, of course Esurance also offers an easy online quote request tool, which you can use to collect a quick quote for comparisons.