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What does uninsured and underinsured motorist coverage do?
Uninsured and underinsured motorist coverage helps protect you when another driver causes a crash but cannot pay for your injuries or losses. Instead of relying entirely on the at-fault driver’s ability to pay, you may be able to make a claim under your own auto insurance policy.
The coverage is often shortened to UM/UIM:
- Uninsured motorist coverage, or UM: Applies when the responsible driver has no insurance or cannot be identified, such as in some hit-and-run crashes.
- Underinsured motorist coverage, or UIM: Applies when the responsible driver has insurance, but the policy limits are not high enough to cover the full value of the injuries and damages.
This protection is separate from liability coverage. Liability insurance pays people you injure or whose property you damage. UM/UIM coverage is designed to help protect you and eligible household members from other drivers.
Is this coverage required in Indiana?
Indiana auto liability policies generally must include uninsured and underinsured motorist coverage unless the policyholder rejects it in writing. The coverage is included automatically on many newly issued policies, but a written rejection can remove it.
Indiana’s minimum liability requirement is commonly described as 25/50/25:
- $25,000 for bodily injury or death of one person
- $50,000 for bodily injury or death of two or more people in one crash
- $25,000 for property damage in one crash
Indiana also requires at least $50,000 in underinsured bodily injury coverage when that coverage applies under the policy. The exact limits, exclusions, deductibles, and claim procedures depend on the policy language.
A policy that satisfies the state minimum may meet legal requirements but still provide limited financial protection after a serious crash. Hospital care, rehabilitation, lost income, long-term treatment, and vehicle damage can exceed minimum limits quickly.
How is an uninsured driver identified?
A driver may be treated as uninsured when no applicable liability insurance exists for the vehicle or driver involved in the accident. This can happen if the driver never purchased insurance, allowed coverage to lapse, or was excluded from the policy.
A hit-and-run driver may also fall within the uninsured motorist category, but the policy usually requires reasonable efforts to identify the vehicle or driver. Reporting the crash promptly and documenting what happened can become especially important in these situations.
A driver may have an insurance card but still create an uninsured motorist claim if the insurer later denies coverage or determines that the policy does not apply. The claim decision may depend on the reason for the denial and the terms of both policies.
What does underinsured mean?
An underinsured driver has liability insurance, but the available limits are too low to cover the injured person’s legally recoverable damages.
For example, suppose a driver has a $25,000 bodily injury limit and causes injuries that result in $75,000 of medical bills, lost income, and other covered damages. The at-fault driver’s policy may pay up to its limit, but it may not cover the remaining amount. Underinsured motorist coverage may help address the gap, subject to the insured person’s own limits and the policy’s rules.
The calculation is not always as simple as subtracting one policy limit from another. Insurers may consider medical expenses, wage loss, pain and suffering, fault, settlements, liens, and other factors. Coverage may also be affected by payments from other insurance policies.
Does UM/UIM coverage pay for vehicle damage?
Uninsured motorist property damage coverage may help pay for damage to your vehicle caused by an uninsured driver. Indiana policies must offer this coverage, although the policy may include a deductible within limits allowed by state law.
Property damage coverage is not the same as bodily injury coverage. A policy may provide protection for injuries but have different terms for damage to a car, personal property, or other items.
Collision coverage may also respond to vehicle damage regardless of who caused the crash, subject to the collision deductible. The appropriate coverage depends on the circumstances and the policy language.
Who may be protected by the coverage?
The named insured is generally the primary person protected by UM/UIM coverage. Depending on the policy, protection may also extend to household relatives, passengers, permissive occupants, or people using a covered vehicle.
Coverage can become complicated when:
- A household has several vehicles or policies
- A person is injured as a pedestrian or bicyclist
- The accident occurs in a borrowed, rented, or employer-owned vehicle
- Multiple insurance policies may apply
- The injured person is a passenger
- A driver is excluded from the policy
- The accident occurs outside Indiana
The vehicle owner’s policy may be considered primary in some passenger situations, while another policy may provide additional or excess protection. Policy wording controls, so the declarations page alone may not answer every coverage question.
How does a claim usually work?
After a crash, report the accident to law enforcement when required or appropriate, seek medical attention for injuries, and notify your insurer promptly. Avoid assuming that an early settlement offer reflects the full value of a claim, especially when injuries or future treatment are uncertain.
A UM/UIM claim commonly involves:
- Establishing that the other driver was at fault
- Confirming whether the other driver had insurance
- Documenting medical treatment and expenses
- Proving lost wages or reduced earning ability
- Reviewing available liability limits
- Identifying all potentially applicable insurance policies
- Obtaining the insurer’s consent before settling with the at-fault driver in some circumstances
Do not sign a release or settle an injury claim without understanding how it may affect your own UM/UIM rights. Some policies require the insurer to receive notice and approve a settlement before the insured releases the responsible driver.
If a claim is denied, request the explanation in writing, including the policy provisions used to support the decision. A complicated injury claim, disputed fault determination, or disagreement about coverage may require legal advice because deadlines and procedural requirements can apply.
What should Fort Wayne households review on an auto policy?
For drivers in Fort Wayne, winter weather, freezing conditions, reduced visibility, and changing road conditions can increase the possibility of crashes during certain parts of the year. A policy review is useful after purchasing a vehicle, adding a household driver, moving, changing work-related driving habits, or experiencing a major change in income or savings.
Check the declarations page for:
- UM bodily injury limits
- UIM bodily injury limits
- UM property damage coverage
- Whether coverage applies per person and per accident
- Deductibles and exclusions
- Stacking or non-stacking provisions
- Listed drivers and excluded drivers
- Coverage for borrowed or newly acquired vehicles
It is also worth confirming that the policy limits reflect the household’s financial situation. State minimum coverage can be appropriate for some budgets, but it may leave substantial expenses uncovered after a serious injury.
Common misconceptions about UM/UIM coverage
“The other driver has insurance, so my expenses will be covered.”
Not necessarily. The other driver’s limits may be too low, or the policy may not cover every person or circumstance involved.
“Health insurance makes UM/UIM unnecessary.”
Health insurance may pay medical bills, but it may not cover lost income, pain and suffering, deductibles, copayments, or other damages. Health insurers may also seek reimbursement from a later settlement.
“A hit-and-run is never covered.”
Some hit-and-run losses may qualify under uninsured motorist coverage, but the policy may require prompt reporting and evidence supporting the accident.
“UM/UIM coverage protects only the vehicle.”
Bodily injury UM/UIM coverage primarily protects people, not just the car. It may apply in situations where an insured person is riding in a vehicle, walking, or otherwise injured by an uninsured or underinsured motorist, depending on the policy.
Understanding these distinctions before a crash makes it easier to recognize what protection is available and what information should be preserved after an accident.