The Case For Uninsured Motorist Coverage
1. Uninsured driver rates are shockingly high
National average: 12.6% of drivers are uninsured (Insurance Research Council, 2024). In some states, it's even worse:
- Mississippi: 29.4% (nearly 1 in 3 drivers)
- Michigan: 25.5%
- Tennessee: 23.7%
- Florida: 20.4%
- New Mexico: 21.8%
If you drive regularly for 50 years, you're statistically likely to encounter multiple uninsured drivers—and possibly be in an accident with one.
2. Uninsured drivers cause $2.6 billion in losses annually
According to the Insurance Information Institute, accidents involving uninsured drivers result in billions in uncompensated damages every year. Without UM coverage, those losses fall on victims.
3. Lawsuits against uninsured drivers are usually worthless
Even if you sue an uninsured driver and win a $100,000 judgment, you'll likely collect nothing. Uninsured drivers rarely have assets or income to garnish. UM coverage solves this problem: your insurer pays immediately, then pursues the driver for reimbursement (subrogation).
4. Medical bills from serious accidents easily exceed $100,000
A single serious accident can generate: • $30,000-$100,000+ in emergency room and hospital costs • $50,000-$200,000+ for surgery and long-term treatment • $10,000-$50,000+ in lost wages • Pain and suffering damages (often 2-3x medical costs)
Without UM coverage, you pay 100% out-of-pocket or go into debt—even if you have health insurance (which doesn't cover lost wages or pain/suffering).
5. UM coverage is incredibly affordable
Average cost: $75-200/year (5-15% of total premium) Cost per day: $0.20-$0.55 Protection: Up to $100,000-$500,000+ per accident
For the price of a daily coffee, you avoid potential financial ruin.
6. UM claims don't increase your rates
Filing a UM claim is considered a not-at-fault claim. In most states, insurers are prohibited from raising your rates after UM claims. (Always verify with your insurer, as policies vary.)
7. Many states require UM coverage—or strongly recommend it
More than 20 states mandate UM coverage, recognizing the public risk of uninsured drivers. Even in states where it's optional, insurers must offer it—and for good reason.
For a detailed overview, see our complete guide on uninsured motorist coverage.
The Case Against Uninsured Motorist Coverage (When to Skip It)
UM coverage isn't essential for everyone. Consider skipping it if:
1. You rarely drive or live in a very low-risk area • You drive less than 1,000 miles/year • You live in a state with <5% uninsured drivers (e.g., New Jersey, Massachusetts) • You rarely encounter other vehicles (rural area, work from home)
2. You have excellent health insurance with low out-of-pocket maximums • Your health insurance covers all medical costs with <$3,000 out-of-pocket max • You have significant emergency savings to cover lost wages • You're comfortable self-insuring for pain/suffering damages
Note: Even with great health insurance, UM covers non-medical damages (lost wages, pain/suffering, funeral costs) that health insurance won't pay.
3. Your car is very old and worth little • Vehicle value <$2,000 • You have no collision or comprehensive coverage • You're dropping all optional coverages to save money
Note: UMBI (uninsured motorist bodily injury) is still valuable even if your car is worthless—it covers your injuries, not vehicle damage.
4. You have minimal assets and judgment-proof status • You have few assets to protect • You're comfortable accepting higher personal financial risk • You can declare bankruptcy if necessary (not recommended, but some people accept this risk)
Bottom line: For the vast majority of drivers, the cost-benefit analysis strongly favors buying UM coverage. It's only worth skipping in rare cases where you have excellent health insurance, rarely drive, and have significant emergency savings.
How Much UM Coverage Should You Buy?
Standard recommendation: Match your liability limits
If you carry: • 100/300 liability → buy 100/300 UM • 250/500 liability → buy 250/500 UM • 500/500 liability → buy 500/500 UM
Why match limits?
Medical costs don't change based on who causes the accident. If you think $250,000 is adequate to protect others when you're at fault, you need the same protection when others are at fault toward you.
When to buy MORE UM than liability:
High-uninsured states (>20% uninsured rate) • Mississippi, Michigan, Tennessee, Florida, New Mexico, Washington • Risk of hitting uninsured driver is 1-in-4 to 1-in-3
High-net-worth individuals • Significant assets to protect • Higher risk of large judgments • Consider 500/500 UM or umbrella policy
Poor health insurance • High deductibles ($5,000+) • Limited coverage or high out-of-pocket maximums • UM becomes your primary protection for medical costs
Dangerous commutes • High-traffic areas • Long daily commutes • Frequent highway driving
Cost difference is minimal: • 100/300 UM: ~$100/year • 250/500 UM: ~$130/year • 500/500 UM: ~$180/year
The difference between low and high limits is often just $30-80/year—an easy choice for significantly better protection.
Consider stacking (if available):
Stacking combines UM limits from multiple vehicles: • Two cars with 100/300 UM each = 200/600 total coverage • Costs 30-50% more but doubles protection • Available in ~30 states
For more guidance, see our article on what happens if someone hits me and has no insurance.
What About Underinsured Motorist (UIM) Coverage?
Underinsured motorist (UIM) coverage is UM's companion—and equally important.
UIM protects you when at-fault drivers have insurance, but not enough. Many states require only $25,000-$50,000 in liability coverage. A serious accident easily generates $100,000+ in medical bills—UIM covers the gap.
Example: • Your medical bills: $150,000 • At-fault driver's liability limit: $25,000 (state minimum) • Their insurance pays: $25,000 • Your UIM coverage (250/500): Pays remaining $125,000 • Without UIM: You pay $125,000 out-of-pocket
Cost: UIM is often bundled with UM as UM/UIM coverage at little additional cost. If offered separately, UIM typically costs $50-150/year.
Recommendation: Always buy UM and UIM together, matching your liability limits. The combined cost is still just $150-300/year for comprehensive protection.
For more details, see our guide on what is underinsured motorist coverage.
Real-World Cost-Benefit Analysis
Scenario 1: Serious accident with uninsured driver
Costs without UM coverage: • Medical bills: $75,000 • Lost wages (3 months): $15,000 • Vehicle repair: $8,000 (paid by collision if you have it) • Pain/suffering: Not compensated • Total out-of-pocket: $90,000+
Costs with UM coverage: • UM premium (10 years): $1,500 • UM deductible: $0 (UMBI typically has no deductible) • Total cost: $1,500 • Savings: $88,500
Scenario 2: Moderate accident with uninsured driver
Costs without UM coverage: • Medical bills: $25,000 • Lost wages (2 weeks): $2,000 • Vehicle repair: $4,000 (paid by collision if you have it) • Total out-of-pocket: $27,000+
Costs with UM coverage: • UM premium (10 years): $1,500 • UM deductible: $0 • Total cost: $1,500 • Savings: $25,500
Scenario 3: No accident in 10 years
Cost without UM: $0 Cost with UM: $1,500 Loss: $1,500
But you had peace of mind and protection worth up to $100,000-$500,000.
Insurance is always a gamble—you pay premiums hoping you never need them. But with 1-in-8 drivers uninsured, the odds of eventually needing UM coverage are high enough to make it an excellent investment.
Expected value calculation: • Probability of accident with uninsured driver over 50 years of driving: ~15-25% • Average UM claim payout: $20,000-$40,000 • Expected value: $3,000-$10,000 • Cost over 50 years: $3,750-$10,000
Even on pure expected value, UM coverage is close to break-even—and that's before considering catastrophic accidents (>$100,000) that would financially ruin you without it.
State Requirements: Is UM Mandatory Where You Live?
UM coverage is mandatory in 20+ states, including:
- Connecticut, DC, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, Wisconsin
In optional states: • Insurers must offer UM coverage • You can reject it in writing • Many agents strongly recommend buying it
Why some states make it mandatory: Legislators recognize that uninsured driver rates are high enough to pose significant public harm. Mandatory UM protects victims from financial ruin when irresponsible drivers cause accidents.
Even if optional, buy it. The $100-200/year cost is trivial compared to the financial catastrophe of being hit by an uninsured driver.
Frequently Asked Questions
Yes, for most drivers. UM coverage costs just $75-200/year and protects against 1-in-8 drivers with no insurance. A single serious accident with an uninsured driver can cause $50,000-$300,000+ in medical bills, lost wages, and uncompensated damages. For $0.50/day, UM coverage is one of the best insurance values available.
UM coverage typically costs $75-200/year, or 5-15% of your total premium. The cost depends on your state's uninsured driver rate, your coverage limits, and whether you choose stackable coverage. Higher limits (250/500 vs. 100/300) add just $30-80/year—a small price for significantly better protection.
Yes. Health insurance covers medical bills but not lost wages, pain and suffering, funeral costs, or other non-medical damages. UM coverage provides comprehensive protection: medical expenses (including your health insurance deductible), lost income, future earning capacity, pain/suffering, and legal fees. Even with excellent health insurance, UM is essential.
You have two bad options: (1) pay all medical bills, lost wages, and damages yourself, or (2) sue the uninsured driver—who likely has no assets to collect against. Without UM coverage, a serious accident can cause medical bankruptcy and financial ruin. UM coverage prevents this by covering your losses immediately.
Yes, unless you rarely drive and have excellent health insurance with significant emergency savings. Even in low-uninsured states (3-5% uninsured), the risk still exists—and catastrophic accidents can happen to anyone. For $100-150/year, the protection is worth it even in low-risk areas.
In most states, yes—you can reject UM coverage in writing. However, this is rarely advisable unless you have excellent health insurance, rarely drive, and have significant assets to self-insure. In 20+ states, UM coverage is mandatory and cannot be rejected.