Uninsured motorist claims: when the other driver can't pay

What UM and UIM coverage pay

In a standard personal auto policy, uninsured motorists coverage is Part C. The NAIC describes it as coverage that reimburses you if an uninsured or a hit-and-run driver hits you, and underinsured coverage as paying when an at-fault driver doesn't have enough insurance to pay for your loss fully. Some states require these coverages; others make insurers offer them. Texas, for example, requires UM/UIM to be offered and lets you reject it only in writing. Your declarations page lists each coverage you carry and its limits, usually per person and per accident; whether your state requires UM coverage at all is covered by our sister site Brookguard. Find those limits before you talk to an adjuster, because they cap what this claim can pay.

A hit-and-run crash is usually a UM claim, but policies set conditions such as reporting the crash to the police promptly. Our page on hit-and-run accidents covers what to do at the scene, and a crash with an uninsured driver covers the first days.

Stacking limits across cars

Stacking means adding together the UM or UIM limits of more than one car, or more than one policy, so more money is available for one injury. Whether you can stack depends on state law and the policy wording. Some states allow it by default, some let insurers limit it, and the details change with the number of cars and who owns them.

Pennsylvania is a clear example. Under 75 Pa.C.S. §1738, when more than one car is insured, the limit for an injured insured is the sum of the limits for each car. A named insured may waive stacking by signing the statutory rejection form, and the premium must then be reduced to reflect the different cost. Your declarations page shows whether you have stacked or unstacked limits.

Settling with the driver at fault

A UIM claim usually starts with the at-fault driver's liability insurer offering its limit. Don't accept and sign a release yet. Your UIM insurer has a right to recover what it pays from the at-fault driver, and a release can wipe that right out. That is why UIM coverage commonly requires you to notify your insurer of the offer and get its consent first; settling without it can put your UIM benefits at risk.

Some states write the procedure into law. Kentucky's KRS 304.39-320 requires written notice of the proposed settlement, by certified or registered mail, to every UIM insurer. The UIM insurer then has 30 days to consent or to keep its recovery rights by paying you the amount of the liability insurer's written offer itself. The 2024 amendments apply to policies issued or renewed on or after April 2, 2024.

1. Get the offer in writing from the liability insurer, with its policy limit confirmed.
2. Send it to your own insurer in a way that proves delivery, and ask in writing for consent to settle or for its decision within your state's deadline.
3. Sign the release only after you have that consent, or the time your state allows has passed without an answer.

When you and your insurer disagree

On a UM or UIM claim, your own insurer plays the role of the other driver's insurer. It can argue that the other driver wasn't at fault, that your injuries are smaller than you say, or that you share the blame. The NAIC's model claims rules still apply: it has to investigate, answer within set times and explain a denial in writing.

• Arbitration clauses. Your policy's UM section may say that disputes over fault or the amount go to arbitration. Read whether either side can demand it, whether the result binds both sides, how arbitrators are chosen and who pays them.
• State payment rules. Some states set their own clock for these benefits. In Idaho, an insurer that doesn't pay the amount justly due within 60 days after proof of loss on a UM or UIM claim can owe your attorney's fees in a suit to recover it.
• Your own deadlines. Policies and state laws set time limits for UM claims and suits that may differ from the deadline to sue the driver. Check your policy and your state page.

If your insurer denies the claim or offers less than the evidence supports, our page on a denied car insurance claim lays out the next steps in order of cost.

What to send with a UM claim

• Proof the other driver had no insurance or too little: a denial letter from their insurer, a police report, or a declarations page showing the limit.
• The police report number, especially after a hit-and-run.
• Medical records and bills, and proof of lost income.
• Photos and repair estimates for a UMPD claim.

After your insurer pays, it may pursue the uninsured driver for its money, as it would on any claim; see subrogation and your deductible.

Questions people ask