Skip to main content

7.5 Part C – Uninsured Motorists (UM) Coverage

Insuring Agreement​

Part C – Uninsured Motorists Coverage protects insureds who suffer bodily injury in an auto accident caused by the owner or operator of an uninsured motor vehicle. This coverage is designed to respond when the at-fault driver does not have adequate collectible bodily injury liability coverage.

State law may define an uninsured motor vehicle differently, but under the standard Personal Auto Policy, an uninsured motor vehicle includes a vehicle that:

  • Has no bodily injury liability insurance or bond in effect at the time of the accident
  • Has bodily injury liability insurance or a bond, but the limit is less than the minimum limit required by the financial responsibility law of the state where your covered auto is principally garaged
  • Has bodily injury liability insurance or a bond, but coverage is denied by the insurer or bonding company
  • Has bodily injury liability insurance or a bond, but the insurer or bonding company becomes insolvent
  • Is a hit-and-run vehicle whose owner or operator cannot be identified and that strikes:
    • The named insured or any family member
    • A vehicle occupied by the named insured or any family member
    • Your covered auto

The definition of an uninsured motor vehicle does not include every type of vehicle or equipment. Certain vehicles are excluded from this definition even if no collectible liability insurance is available. An uninsured motor vehicle does not include a vehicle or equipment that is:

  • Owned by the named insured or a family member, or furnished for their regular use
  • Owned or operated by a self-insurer, unless the self-insurer is insolvent
  • Owned by a governmental agency
  • Operated on rails or crawler treads, such as a train or bulldozer
  • Designed mainly for use off public roads, such as a snowmobile or ATV
  • Used as a residence, such as a motor home or trailer being used as a dwelling

Under Part C – Uninsured Motorists Coverage, the insurer pays compensatory damages that an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle. The uninsured motorist must be legally responsible for the accident because of the ownership, maintenance, or use of that uninsured motor vehicle. This coverage applies only to bodily injury, which includes bodily harm, sickness, disease, and any resulting death. Unless the policy specifically provides uninsured motorists property damage (UMPD) coverage, Part C does not cover damage to the insured's vehicle or other property. UMPD coverage is available or required in some states, but it is not automatically included under the standard Part C bodily injury coverage unless the policy is written to provide it.

Part C Insureds​

Under Part C – Uninsured Motorists Coverage, insureds include:

  • The named insured
  • Any family member
  • Any person occupying your covered auto
  • Any other person entitled to recover damages because of bodily injury covered under Part C

A passenger must be occupying your covered auto to qualify as an insured under this coverage. However, the named insured and family members receive broader protection. They may be covered for bodily injury caused by an uninsured motorist while occupying any auto, including a non-owned auto, or while acting as pedestrians.

Example

J is injured in an accident caused by an uninsured motorist and suffers two broken legs. Because of the injuries, J is temporarily unable to care for their children.

Under Part C – Uninsured Motorists Coverage, J's children may be entitled to recover damages for the loss of care resulting from J's bodily injury. This is because Part C may extend to other persons who are legally entitled to recover damages because of an insured's covered bodily injury.

Part C Exclusions​

Part C – Uninsured Motorists Coverage contains several exclusions that limit when coverage applies. These exclusions prevent coverage for certain owned vehicles, impaired recovery rights, public or livery use, and unauthorized vehicle use. Coverage under Part C is not provided for bodily injury sustained by:

  • An insured while occupying, or when struck by, an auto owned by that insured that is not covered by the policy
  • A family member while occupying, or when struck by, an auto owned by the named insured that is insured under a different policy
  • Any insured who settles a bodily injury claim in a way that impairs the insurer's right to recover payment from another party
  • Any insured while occupying your covered auto when it is being used as a public or livery conveyance
    • This exclusion does not apply to a share-the-expense car pool.
  • Any insured while using a vehicle without a reasonable belief of entitlement to do so
    • Family members are considered to have a reasonable belief of entitlement when using your covered auto.

Part C does not provide coverage to the extent the bodily injury is covered by Workers' Compensation or disability benefits. When those benefits apply, they must respond first. Part C – Uninsured Motorists Coverage applies only after the available Workers' Compensation or disability coverage has been considered, subject to the policy's terms, exclusions, and limits.

Part C – Uninsured Motorists Coverage does not provide coverage for punitive or exemplary damages. These damages are intended to punish a wrongdoer or discourage similar conduct, rather than compensate the injured insured for actual bodily injury. Part C is designed to pay compensatory damages the insured is legally entitled to recover, subject to the policy's terms, exclusions, and limits.

Limit of Liability​

Part C – Uninsured Motorists Coverage typically uses split limits, which are subject to the financial responsibility laws of the state where the policy applies. At a minimum, the Declarations will show:

  • A per person bodily injury limit, which is the most the insurer will pay for bodily injury to any one person in one accident
  • A per accident bodily injury limit, which is the most the insurer will pay for all bodily injuries arising out of one accident

These limits are the most the insurer will pay regardless of the number of:

  • Insureds
  • Claims made
  • Vehicles or premiums shown in the Declarations
  • Vehicles involved in the accident

If the same loss is covered under another part of the policy or under another insurance policy, payment will not be duplicated.

Other Insurance​

If more than one policy provides uninsured motorists coverage for the same loss, the insured may not stack the limits to increase the total amount available. The most the insured may collect is the highest limit that applies to any one vehicle under the available policies. For example, if one policy provides uninsured motorists limits of 100/300 and another applicable policy provides limits of 50/100, the most the insured may collect is 100/300. The insured may not add the two policies together to create higher limits.

If more than one policy provides uninsured motorists coverage for the same loss, the insurer will pay only its pro rata share. The insurer's share is based on the proportion its limit of liability bears to the total limits of all applicable coverage. In other words, each applicable policy contributes according to its share of the total available uninsured motorists coverage.

If the loss occurs while the named insured or a family member is occupying a non-owned vehicle, the insurance policy covering that non-owned vehicle applies first as primary coverage. The insured's own policy applies as excess coverage. This means the insured's policy responds only after the primary policy covering the non-owned vehicle has paid, subject to the policy's terms and limits.

Underinsured Motorists (UIM) Coverage​

Underinsured motorists coverage is different from uninsured motorists coverage. In general, underinsured motorists coverage applies when an insured suffers bodily injury in an accident caused by a driver who has auto liability insurance, but whose policy limits are not high enough to fully pay the damages owed. In many cases, the at-fault driver's liability coverage may meet the state's minimum financial responsibility requirements, but still be inadequate for the severity of the claim. State law may provide a more specific definition of who qualifies as an underinsured motorist, so the exact application of this coverage may vary by state.

Some states require underinsured motorists coverage, either as a separate coverage or combined with uninsured motorists coverage. In other states, UIM coverage is optional and may be added by endorsement. UIM coverage applies when the at-fault driver's liability limit is not enough to fully pay the insured's damages. The coverage may pay the amount of the loss that exceeds the at-fault party's liability limit, up to the insured's UIM limit shown in the Declarations.

Example

S is injured in an accident caused by another driver. S suffers serious bodily injuries and is awarded $40,000 in damages.

The at-fault driver carries 30/60/10 liability limits. Although those limits satisfy the state's minimum financial responsibility requirements, the driver's $30,000 per person bodily injury limit is not enough to pay the full amount owed to S.

After the at-fault driver's insurer pays its $30,000 per person limit, $10,000 in damages remains unpaid. S's insurer may pay the remaining amount under S's underinsured motorists coverage, subject to the UIM limit shown in the Declarations.

After making payment, S's insurer may seek recovery from the legally responsible driver through its subrogation rights.