Uninsured/Underinsured Motorist Claims: What Happens When the Other Driver Can't Pay

You did everything right — you weren’t at fault, you have serious injuries, and you have a strong claim. Then you find out the driver who hit you either has no insurance at all, or carries only the state minimum, which won’t come close to covering your medical bills. This happens more often than most people expect, and it’s exactly what uninsured/underinsured motorist (UM/UIM) coverage exists for.

How Common Is This?

Roughly 1 in 8 drivers nationally carries no auto insurance at all, and the rate is significantly higher in some states. On top of that, many insured drivers carry only their state’s minimum liability limits — often as low as $10,000–$25,000 per person — which can be exhausted almost immediately in a serious injury case.

What Is UM/UIM Coverage?

Uninsured motorist (UM) coverage pays out when the at-fault driver has no insurance at all.

Underinsured motorist (UIM) coverage pays out when the at-fault driver has insurance, but their policy limits aren’t enough to cover your full damages. UIM effectively “fills the gap” between what the at-fault driver’s insurer pays and what your actual damages are worth.

Critically, this isn’t the at-fault driver’s coverage — it’s a coverage you purchase on your own policy, and you make the claim against your own insurer, even though you weren’t at fault.

Is UM/UIM Coverage Required?

It depends on your state. Some states require insurers to offer UM/UIM coverage (though you can often reject it in writing), while a smaller number of states mandate it outright. Because state minimum liability limits are often so low, insurance professionals widely recommend carrying UM/UIM coverage even where it isn’t required — it’s relatively inexpensive relative to the protection it provides.

How a UM/UIM Claim Works

The at-fault driver’s insurance (if any) pays out first, up to their policy limits.
You file a claim against your own UM/UIM coverage for the remaining gap between your damages and what the at-fault driver’s insurer paid (or the full amount, if they were uninsured).
Your own insurer investigates the claim much like a third-party insurer would — they can dispute fault, injury severity, and damages, even though you’re their own policyholder.
Some states allow “stacking” — combining UM/UIM limits across multiple vehicles on your policy, or with a household member’s policy, to increase your available coverage.

Why These Claims Can Be Surprisingly Adversarial

A common misconception is that a UM/UIM claim against your own insurer will be smoother than a third-party claim, since you’re a paying customer. In practice, UM/UIM claims are often contested just as hard, if not harder — your own insurer has the same financial incentive to minimize the payout, and disputes over injury severity, causation, and damages are common. This is one of the most overlooked reasons to have an attorney review a UM/UIM claim rather than assuming your own insurer will simply “do right by you.”

What to Do If the At-Fault Driver Is Uninsured or Underinsured

Report the accident to your own insurer immediately and ask specifically about your UM/UIM coverage — don’t wait for them to bring it up.
Get a copy of your own policy’s declarations page to confirm your UM/UIM limits; many drivers don’t know what they’re carrying.
Document your damages thoroughly, just as you would for a standard claim — medical records, wage loss, and a clear description of how the accident happened.
Don’t assume your insurer’s first offer reflects your policy’s full potential — UM/UIM claims are negotiated the same way third-party claims are.
Ask whether stacking applies if you have multiple vehicles insured, or live with a relative who has their own auto policy.

The Bottom Line

An uninsured or underinsured at-fault driver doesn’t have to mean an uncompensated claim — but it does mean the claim moves through your own insurer’s UM/UIM coverage instead of the other driver’s policy, and it’s negotiated with the same rigor (and often the same resistance) as any other claim. Check your policy’s UM/UIM limits before you need them, and treat a claim against your own UM/UIM coverage with the same preparation you would a third-party claim.

Use our car accident settlement calculator to estimate what your claim might be worth, and consult a personal injury attorney if your insurer’s UM/UIM offer seems low relative to your damages.