UM / UIM Coverage

Why is Uninsured / Underinsured Coverage so Important? (UM/UIM)

Examples of why UM/UIM Coverage is so important

Many of us have heard the stories where a family or friend has been injured by a driver who was not insured or barely carrying the minimum limits.

  • A family  is burdened with horrific medical bills because of an accident caused by a drunk driver who couldn’t afford insurance due to his/her bad driving record.
  • A child walking to school faces a lifetime of difficulty after being struck by a struggling driver who was texting and only has minimum auto limits.
  • A pair of sweethearts fall victim to a hit-and-run driver

Excess UM/UIM Coverage of a Personal Umbrella

Personal Umbrella coverage is important to protect your assets, however purchasing the UM/UIM coverage under your personal umbrella policy is optional.  Many people would make sure it was included on their umbrella policies if they understood the coverage.

Excess UM/UIM coverage pays for injuries from an accident caused by the owner or operator of an uninsured or under-insured vehicle.

Excess UM/UIM from a personal umbrella policy pays over the auto policy limits when the policy’s UM/UIM limits have been exhausted.
It’s important to understand that UM/UIM coverage comes into play when your vehicle is involved in an accident and the person who caused it either doesn’t have any insurance or doesn’t have enough insurance to pay for the injuries. It would also come into play if you or your family were the victim of a hit-and-run (in a vehicle, on a bike, or as a pedestrian), leaving you with no other insurance policy to collect against making it an “uninsured” motorist claim.

According to recent estimates by the Insurance Research Council (IRC), roughly 1 on 7 drivers is uninsured. If you also consider the number of drivers who carry state minimum auto limits or let their insurance lapse.  It should come as no surprise given the type of advertisements we see from auto insurance companies advertising “cheap” rates.  Too often, the emphasis is on getting a cheap rate, and drivers are besieged with ads about that encourage them to buy “state minimum” auto limits in order to save money. There’s no denying that it can be a temptation for some drivers in a struggling economy.  All the more reason to make sure you are protected from the drivers with UM/UIM coverage on both your auto and personal umbrella policies.


If you’re buying an umbrella so that you can cover the injuries of others, wouldn’t you want to do the same for your own family? Don’t rely on someone else to cover your injuries.

Here’s just one real life scenario-

Mrs. Policyholder was on her way to work when she was rear-ended on the highway, causing her to run off the road and into a concrete barrier. She sustained multiple internal injuries, including a severely fractured ankle, which led to months of treatment and an infection that required additonal hospitalization and more surgery. Unable to work during her recovery, she lost over $100,000 in income while racking up medical bills of over $120,000. She was no longer able to walk long distances or enjoy many of her favorite activities, impacting her life significantly. It was soon discovered that the driver of the other vehicle had state minimum limits of only $10,000 per person/$20,000 per accident. Mrs. Policyholder was paid the full $10,000 available, but the other driver had no other insurance and no assets. Mrs. Policyholder had UM/UIM limits of $250,000 per person/$500,000 per accident under her own auto policy, as well as $1M of UM/UIM coverage under her personal umbrella policy. She was able to recover the amount from her own insurors that she would have been entitled to recover from the other driver had he carried enough insurance. If she hadn’t purchased UM/UIM coverage, her payment would have been only the $10,000 policy limit of the other driver.