Insurance Education
Texas requires drivers to be financially responsible for accidents they cause, and most drivers meet that requirement by carrying auto liability insurance.
But having a legal requirement does not mean every driver on the road is adequately insured.
Some drivers have no insurance at all. Others carry insurance, but their liability limits may not be enough to cover all the damage or injuries they cause.
That is where uninsured and underinsured motorist coverage can become important.
Often abbreviated as UM/UIM, this coverage is designed to help an insured recover certain damages when an at-fault driver either has no insurance or does not have enough applicable liability insurance.
Understanding the difference between uninsured and underinsured motorist coverage can make your auto policy much easier to evaluate.
Not sure what UM/UIM coverage you currently carry? A quick coverage check can help you find out.
Start My Coverage CheckUninsured motorist coverage generally addresses situations in which an insured is legally entitled to recover damages from an at-fault driver who does not have applicable liability insurance.
Consider a straightforward example.
Another driver causes an accident and damages your vehicle. You later discover that the driver did not have liability insurance.
Normally, you would look to the at-fault driver's liability insurance for covered damages.
If that insurance does not exist, uninsured motorist coverage on your own policy may provide another source of coverage, subject to the terms, limits, exclusions, and conditions of your policy.
UM coverage can address more than vehicle damage. Depending on the applicable coverage and circumstances, it can also involve bodily injury.
Underinsured motorist coverage deals with a different problem.
The at-fault driver has insurance, but the available liability coverage is insufficient to compensate for the damages you are legally entitled to recover.
For example, an accident could involve significant vehicle damage, medical expenses, or other covered damages that exceed the amount available from the responsible driver's liability insurance.
Underinsured motorist coverage may then apply, subject to your policy and applicable Texas law.
This is an important distinction:
Uninsured means there is no applicable insurance.
Underinsured means insurance exists, but the available amount is insufficient for the covered damages.
Texas gives UM/UIM coverage an important place in personal auto insurance.
Under Texas law, automobile liability policies issued in the state generally must provide uninsured and underinsured motorist coverage unless the named insured rejects that coverage in writing.
That means UM/UIM is not simply something Texas drivers should assume is either included or excluded.
Look at your actual policy.
Your declarations page can help show whether you carry UM/UIM coverage and the limits associated with it. Your policy and endorsements provide the details about how the coverage works.
If you are uncertain, ask your insurance professional to walk through it with you.
Curious whether your policy currently includes UM/UIM coverage? A quick coverage check can help you find out.
Start My Coverage CheckWhen reviewing UM/UIM coverage, it helps to separate bodily injury from property damage.
Bodily injury coverage can apply to damages involving injuries to covered people when they are legally entitled to recover from an uninsured or underinsured motorist.
Depending on the circumstances and policy, damages can involve items such as medical expenses and other compensable bodily-injury damages.
Property damage coverage can address covered damage to your vehicle and certain other property caused by an uninsured or underinsured motorist.
The Texas Department of Insurance also identifies examples such as property in your vehicle and rental-car expenses among losses that UM/UIM coverage may address.
Your declarations page should identify the UM/UIM coverages and limits you selected.
This is where the "underinsured" part of UM/UIM becomes especially important.
Suppose another driver is responsible for an accident.
The driver has liability insurance, but the amount available from that policy is insufficient to compensate for all damages you are legally entitled to recover.
The existence of the other driver's insurance does not necessarily end the coverage analysis.
Your own underinsured motorist coverage may become relevant.
How much may be available depends on the circumstances, damages, amounts recovered or recoverable from the responsible party, your UM/UIM limits, policy language, and applicable Texas law.
The important lesson is simple:
Having insurance and having enough insurance are not necessarily the same thing.
Hit-and-run accidents create an obvious problem.
If the responsible driver leaves and cannot be identified, there may be no other driver's insurance company to pursue.
Texas Department of Insurance consumer guidance states that uninsured/underinsured motorist coverage can apply when you are involved in a hit-and-run accident and the other driver cannot be found.
There can be important policy and legal requirements surrounding hit-and-run claims, including circumstances involving physical contact.
Because the facts of hit-and-run accidents vary, drivers should not assume that every unidentified-driver situation will automatically qualify for UM/UIM coverage.
Review the specific policy and report an accident promptly to the appropriate insurer and authorities.
No.
They can sometimes appear relevant to the same accident, but they are different coverages.
Collision coverage generally helps pay to repair or replace your insured vehicle after a collision, subject to the policy and deductible.
UM/UIM coverage is focused on damages an insured is legally entitled to recover from an uninsured or underinsured motorist, subject to policy terms and Texas law.
For example, Texas Department of Insurance guidance notes that collision coverage may pay for vehicle repairs following an accident with an uninsured or underinsured driver.
That does not make collision and UM/UIM interchangeable.
The coverages can have different deductibles, limits, provisions, and potentially different categories of covered damages.
Understanding which coverages you actually carry is more useful than assuming one automatically substitutes for another.
Want to know how your UM/UIM coverage compares to your collision coverage? A quick coverage check can help you find out.
Start My Coverage CheckFor UM/UIM property damage, Texas Department of Insurance consumer guidance identifies a $250 deductible.
That can differ from the deductible a driver selected for collision coverage.
Bodily-injury coverage should not simply be treated as though it works identically to property-damage coverage.
Always review the declarations page and policy terms to understand the limits and deductibles that apply to your specific coverage.
Your declarations page is the best place to start.
Look for entries referring to:
Then look at the associated coverage limits.
Do not stop at confirming that the coverage exists.
Ask what the limits mean and how they compare with the potential financial exposure you are trying to address.
Insurance decisions should be based on your circumstances rather than simply selecting a coverage because it appears on a quote.
A useful auto insurance review should go beyond asking, "Do I have full coverage?"
"Full coverage" is not a standardized insurance policy.
Instead, ask specific questions:
Those questions lead to a much more useful insurance conversation than focusing only on premium.
UM/UIM is only one part of an auto insurance policy.
If you're trying to understand liability limits, collision, comprehensive, personal injury protection, and other coverage choices along with UM/UIM, start with our broader guide, "How Much Auto Insurance Do You Need in Texas?"
That guide provides a broader framework for reviewing a Texas auto insurance policy.
This article takes the next step by focusing specifically on uninsured and underinsured motorist coverage, including the distinction between UM and UIM, bodily injury and property damage, hit-and-run situations, the property-damage deductible, and how UM/UIM differs from collision coverage.
Uninsured and underinsured motorist coverage addresses a risk that liability insurance alone cannot solve:
The person who causes the accident may not have enough insurance to pay for the damages they caused.
Uninsured motorist coverage generally addresses an at-fault driver without applicable liability insurance.
Underinsured motorist coverage addresses situations in which applicable liability insurance exists but is insufficient to compensate for covered damages.
Texas law generally requires insurers to provide UM/UIM coverage unless the named insured rejects it in writing, but that does not mean every policy has the same limits or that every accident will qualify for coverage.
Check your declarations page.
Understand your limits.
Know how UM/UIM differs from collision coverage.
And if something on the policy is unclear, ask questions before you need the coverage.
Carade exists to help Texas consumers understand insurance before they have to use it.
Ready to see exactly what your policy includes? A quick coverage check can help you understand your UM/UIM limits and how they fit your situation.
Start My Coverage CheckCommon Questions
Texas UM/UIM coverage questions, answered plainly.
Texas automobile liability policies generally must provide uninsured and underinsured motorist coverage unless the named insured rejects the coverage in writing. Check your declarations page and policy documents to confirm the coverage you currently carry.
Uninsured motorist coverage generally applies when an at-fault driver does not have applicable liability insurance. Underinsured motorist coverage addresses situations in which the at-fault driver has liability insurance, but the available coverage is insufficient to compensate for covered damages.
Texas Department of Insurance guidance states that UM/UIM coverage can apply to hit-and-run accidents when the other driver cannot be found. Policy and legal requirements can apply, including requirements involving physical contact in some circumstances, so coverage should be evaluated based on the specific accident and policy.
No. Collision coverage generally addresses damage to your insured vehicle following a collision, while UM/UIM addresses damages an insured is legally entitled to recover from an uninsured or underinsured motorist. The coverages can have different deductibles, limits, provisions, and covered damages.
Texas Department of Insurance consumer guidance identifies a $250 deductible for uninsured/underinsured motorist property-damage coverage. Review your declarations page and policy to understand the deductibles applicable to your coverage.
Start with the declarations page of your auto policy. It summarizes your coverages, limits, and applicable deductibles. Review the policy and endorsements for the detailed terms, exclusions, and conditions.
Underinsured motorist coverage may become relevant when the at-fault driver's available liability insurance is insufficient to compensate for damages you are legally entitled to recover. Any payment depends on the facts, available insurance, your UM/UIM limits, policy terms, and applicable Texas law.
About Carade
Carade is a Texas insurance education resource dedicated to helping consumers better understand insurance before making important coverage decisions.
Our guides explain insurance concepts in clear, practical language to help Texans ask better questions, compare options, and make informed decisions with a licensed insurance professional.
This guide is provided for educational purposes only and should not be considered insurance, legal, or financial advice.