Uninsured Motorist Coverage: Why Skipping It Is a Costly Mistake

Fact-checked by the Smart Insurance 101 editorial team

Uninsured motorist coverage (UM coverage) is a component of your auto insurance policy that steps in when the driver who caused your accident carries no liability insurance — or not enough to pay your bills. According to the Insurance Information Institute’s most recent data, roughly 14% of all motorists on U.S. roads are completely uninsured, leaving millions of drivers exposed after every trip.

With medical costs rising and auto litigation increasing, the financial gap left by uninsured drivers is wider than ever. Skipping this coverage to save a few dollars per month is a trade-off most drivers cannot afford to make.

What Exactly Does Uninsured Motorist Coverage Protect?

Uninsured motorist coverage pays for bodily injury, lost wages, and — in many states — property damage when an uninsured or underinsured driver causes a crash. It splits into two distinct sub-coverages that work together to fill the gap left by negligent drivers.

Uninsured Motorist Bodily Injury (UMBI)

UMBI covers medical expenses, rehabilitation costs, lost income, and pain-and-suffering damages for you and your passengers. It activates when the at-fault driver carries zero liability insurance or flees the scene as a hit-and-run driver.

Uninsured Motorist Property Damage (UMPD)

UMPD covers repairs to your vehicle when an uninsured driver damages it. Not all states require insurers to offer UMPD, and some policies exclude hit-and-run claims under this sub-coverage — always verify your state’s rules with your insurer.

A related protection is underinsured motorist coverage (UIM). UIM activates when the at-fault driver has insurance, but their limits are too low to cover your actual damages. Many insurers bundle UM and UIM together, and states like California and Texas require insurers to offer both. For a broader look at how these protections fit into your overall policy, see our guide on everything you need to know about car insurance.

How Many Uninsured Drivers Are on U.S. Roads Right Now?

The uninsured driver problem is larger than most people realize. The Insurance Information Institute estimates that 1 in 8 drivers nationwide — approximately 14% — carries no auto insurance at all. In some states, the rate exceeds 25%.

Mississippi leads the nation with an uninsured driver rate near 29.4%. Michigan, Tennessee, and New Mexico also rank among the highest-risk states. Even in states with strict enforcement, economic pressure causes lapses in coverage that can last months at a time.

The problem compounds during economic downturns. When household budgets tighten, auto insurance is often one of the first expenses people drop. That means the driver next to you at a red light is statistically more likely to be uninsured today than five years ago. If you want to understand why premiums and risk factors are escalating, read our analysis on why insurance premiums are exploding.

What Does Uninsured Motorist Coverage Actually Cost?

Uninsured motorist coverage is one of the least expensive protections you can add to a policy. The average annual cost for UM/UIM coverage is roughly $50–$75 per year, or as little as $5 per month, depending on your state, driving record, and coverage limits.

That cost is dramatically lower than the average bodily injury claim. According to the Insurance Information Institute, the average bodily injury liability claim paid out $24,211 in a recent policy year. A single emergency room visit after a car accident can exceed that figure before rehabilitation or specialist care is even considered.

When shopping for limits, a common recommendation from the National Association of Insurance Commissioners (NAIC) is to match your UM limits to your liability limits. If you carry $100,000/$300,000 in liability, carry the same in UM protection. Our car insurance quotes guide walks through how limits affect your overall premium.

Is Uninsured Motorist Coverage Required by Law?

Whether uninsured motorist coverage is mandatory depends entirely on your state. As of May 2025, 22 states plus Washington D.C. require drivers to carry some form of UM or UIM coverage. In the remaining states, insurers must offer it — but drivers can decline it in writing.

States with mandatory UM requirements include New York, Illinois, Maryland, Virginia, and North Carolina. In these states, minimum limits are set by statute and enforced at registration. States like Florida and Texas require insurers to offer UM coverage but allow written rejection.

No-Fault States and UM Coverage

In no-fault states — such as Florida, Michigan, and New York — your own Personal Injury Protection (PIP) covers your initial medical expenses regardless of fault. However, PIP does not cover lost wages beyond set limits, pain and suffering, or serious injuries that exceed PIP thresholds. Uninsured motorist coverage fills those gaps even in no-fault environments. For a complete view of how overlapping coverages affect your financial protection, see our overview of types of insurance and their benefits.

What Happens If You Skip Uninsured Motorist Coverage?

Without uninsured motorist coverage, your only legal remedy against an uninsured driver is a civil lawsuit — and most uninsured drivers have no assets worth pursuing. A judgment in your favor means nothing if the defendant cannot pay.

Your collision coverage can pay for vehicle repairs in this scenario, but it comes with a deductible — typically $500–$1,000 — and does nothing for medical bills, lost income, or pain and suffering. Health insurance may cover emergency care, but it will not compensate you for income lost while recovering, and many health plans include deductibles and out-of-pocket maximums that can easily exceed $5,000.

Hit-and-run accidents present an additional complication. According to the National Highway Traffic Safety Administration (NHTSA), hit-and-run crashes killed over 2,400 people in a recent reporting year. In most states, UM coverage specifically extends to hit-and-run victims — but only if you carry it. Without it, a hit-and-run is an entirely out-of-pocket event.

The financial exposure is not just theoretical. Serious accident injuries — spinal injuries, traumatic brain injuries, extended hospitalization — routinely generate bills exceeding $100,000. Without UM coverage, that liability falls entirely on the victim. You can explore more about how liability gaps affect policyholders in our article on why lawsuits are quietly getting more expensive.

Frequently Asked Questions

Does uninsured motorist coverage pay if I am hit by a hit-and-run driver?

Yes, in most states uninsured motorist coverage explicitly covers hit-and-run accidents. The at-fault driver is treated as an “unknown uninsured motorist.” Most insurers require you to report the accident to police within a specific time window — typically 24 to 72 hours — to file a valid UM claim.

What is the difference between uninsured and underinsured motorist coverage?

Uninsured motorist coverage (UM) applies when the at-fault driver has no insurance at all. Underinsured motorist coverage (UIM) applies when the at-fault driver has insurance, but their policy limits are too low to cover your actual damages. Most insurers sell these together as a combined UM/UIM endorsement.

How much uninsured motorist coverage should I carry?

The standard recommendation from the NAIC is to match your UM limits to your liability limits. If you carry $100,000 per person and $300,000 per occurrence in liability coverage, mirror those numbers in your UM protection. Higher limits are especially important in states with high uninsured driver rates.

Will filing a uninsured motorist claim raise my insurance rates?

In most states, insurers are prohibited from raising your rates after a UM claim because you were not at fault. However, state laws vary and a small number of insurers may factor UM claims into their risk assessments. Confirm your state’s rules with your insurer or your state’s Department of Insurance before filing.

Is uninsured motorist coverage the same as collision coverage?

No. Collision coverage pays only for physical damage to your vehicle and always requires a deductible. Uninsured motorist coverage covers bodily injury, lost wages, pain and suffering, and — in states offering UMPD — vehicle damage caused by an uninsured driver, often with no deductible or a lower one.

Can I get uninsured motorist coverage if my state does not require it?

Yes. Even in states where UM coverage is optional, every auto insurer operating in that state is required to offer it. You must actively reject it in writing to opt out. Simply not selecting it at purchase may or may not constitute a valid rejection, depending on state law — so review your policy declarations page carefully.