The Difference Between Uninsured and Underinsured Motorist Coverage
Many drivers assume that if they’re involved in an accident, the other driver’s insurance will cover the damages. Unfortunately, that’s not always the case. If the at-fault driver doesn’t have insurance—or doesn’t have enough—you could be left paying out-of-pocket unless you have Uninsured Motorist (UM) or Underinsured Motorist (UIM) coverage.
In North Carolina and many other states, UM and UIM insurance are essential components of a well-rounded auto policy. But what exactly is the difference between them? This guide breaks it down so you can make confident, informed decisions about your car insurance coverage.
What Is Uninsured Motorist Coverage?
Uninsured Motorist (UM) coverage protects you if you’re involved in an accident with a driver who doesn’t carry any auto insurance. This is more common than you might think—even though auto insurance is required by law, not every driver follows the rules.
UM coverage typically includes two components:
- Uninsured Motorist Bodily Injury (UMBI): Covers medical expenses, lost wages, and pain and suffering for you and your passengers if you’re hit by an uninsured driver.
- Uninsured Motorist Property Damage (UMPD): Pays for damages to your vehicle or property caused by an uninsured driver, if not already covered under your collision policy (note: not all states include this).
Without UM coverage, you may have to use your own health insurance or pay out of pocket for injuries resulting from a hit-and-run or uninsured driver accident.
What Is Underinsured Motorist Coverage?
Underinsured Motorist (UIM) coverage kicks in when you’re hit by a driver who has insurance—but not enough to cover all the damages and injuries they’ve caused. If their liability limits are lower than the cost of your injuries or repairs, your UIM policy helps bridge the gap.
Underinsured Motorist coverage also includes two key parts:
- Underinsured Motorist Bodily Injury (UIMBI): Pays for medical expenses and related costs that exceed the at-fault driver’s liability coverage.
- Underinsured Motorist Property Damage (UIMPD): Covers vehicle damage not fully paid by the other driver’s insurance (depending on your state and policy).
This type of coverage is especially important in states with low minimum liability requirements, where even insured drivers may not have enough coverage to handle serious accidents.
Key Differences Between Uninsured and Underinsured Motorist Coverage
| Coverage Type | When It Applies | What It Covers |
|---|---|---|
| Uninsured Motorist (UM) | When the at-fault driver has no insurance | Your medical bills, lost wages, pain and suffering, and possibly property damage |
| Underinsured Motorist (UIM) | When the at-fault driver has insufficient coverage | The difference between their liability limits and your actual expenses |
In many states, including North Carolina, insurance companies often bundle UM and UIM coverage together for simplicity and added protection.
Are UM and UIM Coverage Required in North Carolina?
Yes. In North Carolina, **Uninsured Motorist coverage is required by law** for all drivers. Underinsured Motorist coverage is required only if you purchase higher liability limits than the state minimum. However, both are highly recommended to ensure you’re fully protected on the road.
According to the NC DOT, the standard liability requirements in North Carolina are:
- $30,000 for bodily injury per person
- $60,000 for bodily injury per accident
- $25,000 for property damage
These limits may not be enough in a serious accident, so supplementing with adequate UM and UIM coverage helps you avoid unexpected expenses.
When Does Uninsured or Underinsured Motorist Coverage Apply?
You might need Uninsured Motorist or Underinsured Motorist protection in situations such as:
- A hit-and-run where the other driver can’t be identified
- An accident with a driver who has no valid insurance
- A crash involving a driver with low liability limits that don’t cover your expenses
- An out-of-state accident in a minimum-coverage state
In all of these cases, having UM/UIM coverage ensures you’re not left to pay the difference out of your own pocket.
Final Thoughts
Even if you’re a cautious and responsible driver, you can’t control the actions—or coverage—of others on the road. That’s why Uninsured Motorist and Underinsured Motorist coverage are critical parts of a comprehensive auto insurance policy. They provide an extra layer of security that protects you and your family from financial strain after an accident involving an underinsured or uninsured driver.
If you’re unsure how much UM or UIM coverage you need, speak to a licensed insurance agent who understands North Carolina’s requirements. At TriadCarInsurance.com, we help you compare quotes and find the coverage that gives you peace of mind—without overpaying.
Need Help With Coverage?
Contact us today or find a local agent in your city to review your policy. We’re here to help you understand your options and choose the protection that’s right for you.