Underinsured and uninsured coverage are types of auto insurance coverage designed to protect you financially in case you're involved in an accident with a driver who either doesn't have insurance (uninsured) or doesn't have enough insurance to cover the damages (underinsured).
Uninsured Motorist Coverage (UM): This coverage pays for your medical bills, lost wages, and other damages if you're in an accident caused by a driver who doesn't have any insurance. It essentially steps in to cover the costs that the at-fault driver's insurance should have covered but didn't because they were uninsured.
Underinsured Motorist Coverage (UIM): This coverage kicks in when you're in an accident with a driver who has insurance, but the coverage they have is insufficient to cover all of your expenses. For example, if the at-fault driver's insurance policy limits are lower than the cost of your medical bills and other damages, underinsured motorist coverage can help cover the gap between what the other driver's insurance covers and the actual costs.
Both uninsured and underinsured coverage are optional in most states but highly recommended because they provide an additional layer of financial protection for you and your passengers.
