What is underinsured motorist coverage?
Underinsured motorist coverage, or UIM, is part of your own car insurance that protects you and your passengers when the at-fault driver has insurance, but not enough to cover your injuries. It picks up some of the gap between what you lost and what that driver’s policy can pay, up to your own UIM limit.
Last checked November 9, 2026 · Official sources (5)
How does underinsured motorist coverage work? An example
Example: a driver carrying Arizona’s minimum of $25,000 per person rear-ends you. Your surgery, therapy and lost pay add up to $70,000. That driver’s insurer pays its full $25,000 limit. You still have $45,000 of losses. You carry $50,000 of UIM.
Under Arizona’s approach, UIM applies to the amount your damages exceed the other driver’s limits, so it can cover the $45,000 gap, because that fits under your $50,000 limit. Under a limits-difference approach like the one Wisconsin’s regulator describes, the same $50,000 UIM policy would be compared with the $25,000 limit, and it could pay only $25,000.
Why does UIM matter after a serious crash?
Minimum liability limits are low compared with hospital bills. When injuries are serious, the at-fault driver’s policy often runs out first. UIM is frequently the only remaining source of money from insurance.
Before you accept the other driver’s policy limits, tell your own insurer about the UIM claim. Policies often require notice, and settling without it can cause problems with the UIM claim.
How do states calculate UIM?
| State | How the source describes UIM |
|---|---|
| Arizona | Applies to the difference between total damages and the total liability limits. |
| Wisconsin | Pays the difference between the other driver’s lower limits and your UIM limits. |
| Texas | Insurers must offer UM/UIM, and you must refuse it in writing. |
These two methods can produce very different amounts from the same crash, so the state where your policy was written matters. Ask your insurer which method your policy uses, and ask for the answer in writing. Keep it with your claim file.
Underinsured vs. uninsured motorist coverage
Arizona law says UM and UIM are separate and distinct and apply to different accident situations. Uninsured means the other driver had no coverage; underinsured means the driver had coverage that was too small.
Questions
When do I file a UIM claim?
Usually once it is clear the at-fault driver’s limits will not cover your losses. Tell your own insurer early, before you settle with the other driver.
Is UIM the same as stacking?
No. Stacking means combining limits from more than one vehicle or policy, which some states allow and others limit.
Does UIM pay pain and suffering?
It can, depending on the policy wording. Read the UIM section of your policy, or ask your insurer to answer in writing.
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See if I’m owed moneySources (5)
- Arizona Department of Insurance and Financial Institutions, checked 2026-11-09. “Underinsured Motorist (UIM) coverage protects you or your passengers if the at-fault driver has insufficient insurance to cover your injuries.”
- A.R.S. § 20-259.01, checked 2026-11-09. “To the extent that the total damages exceed the total applicable liability limits, the underinsured motorist coverage provided in subsection B of this section is applicable to the difference.”
- Wisconsin Office of the Commissioner of Insurance, checked 2026-11-09. “Underinsured motorist coverage (UIM) pays if another insured driver causes the accident but has lower bodily injury liability limits than your UIM limits. Your policy will pay the difference between the limits.”
- Texas Department of Insurance, checked 2026-11-09. “It also pays if you’re in a hit-and-run accident. Insurance companies must offer you this coverage. If you don’t want it, you must tell the company in writing.”
- A.R.S. § 20-259.01, checked 2026-11-09. “Uninsured and underinsured motorist coverages are separate and distinct and apply to different accident situations.”