Every guide on this site that mentions cutting coverage to save money ends up at the same warning: don't drop your uninsured motorist coverage. This is the page that explains why.
I'm a Farmers agent in Richardson and I worked corporate claims before opening the agency. On the claims side, UM/UIM is the coverage that decides whether a serious injury claim gets paid or simply doesn't — and it's the one people most often discover they don't have.
What is uninsured and underinsured motorist coverage?
The short answer: Coverage on your own policy that pays when the at-fault driver has no insurance or not enough to cover what they did to you.
Most of your auto policy protects other people from you. Liability pays for the injuries and damage you cause. UM/UIM works in the opposite direction: it protects you and your passengers from somebody else's failure to carry adequate insurance.
The mechanism is straightforward. If an uninsured driver injures you, your own carrier steps into the role the at-fault driver's insurer should have played, up to your UM/UIM limits. You're claiming against your own policy for someone else's fault.
That structure is exactly why people cut it. It feels like insurance for a problem that's somebody else's responsibility — right up until that somebody turns out to have nothing.
Is UM/UIM required in Texas?
The short answer: Your insurer must provide it unless you signed a written rejection, so it isn't mandatory for you — but it is mandatory for them to include.
This is the part almost nobody gets right, and the statute is unusually clear.
Texas Insurance Code §1952.101 states that an insurer may not deliver or issue for delivery in this state an automobile liability insurance policy unless the insurer provides uninsured or underinsured motorist coverage. The coverage must be in at least the limits prescribed by Chapter 601 of the Transportation Code — the same 30/60/25 floor behind the state liability requirement.
The exception is narrow and specific: the requirement does not apply if any insured named in the insurance policy rejects the coverage in writing.
So a signature from six years ago, on a policy you've since renewed a dozen times, can still be why you have no coverage today. Nobody re-asks you.
Go and check your declarations page right now. Look for UM, UIM, or UMBI/UMPD line items. If they're absent, you rejected it at some point — and adding it back is usually a phone call.
How likely is it that you'll actually need it?
The short answer: About one in eight Texas drivers carries no insurance at all, and many of the insured ones carry only the state minimum.
Stack a second number against it. Per ISO data reported by the Insurance Information Institute, the average auto liability claim for bodily injury was $24,211 in 2022. Texas requires $30,000 per injured person.
So the average claim consumes four-fifths of a minimum-limits policy. Anything beyond average — a surgery, a hospital stay, weeks off work — blows through it. When that happens and the at-fault driver has nothing more, the shortfall lands on you unless your own UIM picks it up.
| Situation | Coverage that responds | Whose policy |
|---|---|---|
| You injure someone else | Bodily injury liability | Yours |
| An insured driver injures you | Their bodily injury liability | Theirs |
| An uninsured driver injures you | UM | Yours |
| An underinsured driver injures you | UIM | Yours |
| A hit-and-run driver injures you | UM (contact rules apply) | Yours |
| Your own medical bills, any fault | PIP or medical payments | Yours |
What's the difference between UM and UIM?
The short answer: UM covers you when the at-fault driver has no coverage; UIM covers the shortfall when they have some but not enough.
They're usually sold together and written on the same line of your policy, but they answer different failures.
Uninsured motorist applies when the at-fault driver had no liability coverage at all — the 11.87%. It generally also covers hit-and-run situations, though Texas has rules about physical contact that matter in some claims, so report a hit-and-run promptly and accurately.
Underinsured motorist applies when the at-fault driver had coverage that ran out before your losses did. This is the more common scenario by some distance, because minimum-limits policies are everywhere and medical costs are not small.
The practical implication: if you're tempted to carry UM but skip UIM, you've protected yourself against the less likely of the two problems.
What does UM/UIM actually pay for?
The short answer: Injuries to you and your passengers, and — if you carry the property damage portion — damage to your vehicle.
Medical expenses
Treatment for you and your passengers arising from the crash, up to your UM/UIM bodily injury limit.
Lost wages
Income you lose while recovering. On a serious injury this can rival the medical bills, and it's part of what the coverage is for.
Pain and suffering
UM/UIM bodily injury generally responds to the same categories of damages the at-fault driver's liability policy would have.
Property damage (UMPD)
Damage to your vehicle from an uninsured driver, typically with its own deductible. Worth asking about specifically if you don't carry collision.
Your passengers
People in your car are generally covered under your UM/UIM — which matters if you drive family or carpool.
Some pedestrian situations
Being struck as a pedestrian or cyclist by an uninsured driver can fall under your own UM coverage. Terms vary, so ask how yours is worded.
Worth separating from PIP: personal injury protection pays your own medical costs and some lost wages regardless of fault, usually at modest limits, and pays quickly. UM/UIM addresses the full scope of what an at-fault driver owed you. They complement each other rather than overlapping neatly.
One more practical point, because it changes outcomes. What you do in the first hour of a crash with an uninsured driver matters more than usual. Get a police report — an officer's documentation of the other driver's lack of coverage is what your own carrier will work from. Photograph the scene, the vehicles and the other driver's licence and plate. Get contact details for any witness, because in a UM claim there is no opposing insurer building a file alongside yours.
Then report it to your own carrier promptly even if you are unsure whether you will claim. UM/UIM policies carry notice requirements, and a late report is one of the few ways a legitimate claim runs into trouble. Telling your insurer what happened is not the same as filing, and it preserves your options.
How much UM/UIM should you carry?
The short answer: Match it to your bodily injury liability limits — carrying high liability with minimum UM/UIM protects everyone except you.
This is the mismatch I find most often when I read a declarations page. Someone has thoughtfully raised their liability to 100/300 to protect their assets, and left UM/UIM at 30/60 because nobody walked them through it.
Think about what that says. You've decided a serious injury claim can reach $100,000 per person when you cause it — but capped your own recovery at $30,000 when someone else does. The severity of the injury doesn't depend on who was at fault.
So the default I'd start from is simple: UM/UIM limits equal to your bodily injury liability limits. If 100/300 is right for protecting your assets, it's right for protecting your family. How to choose that underlying number is worked through in Texas bodily injury liability limits.
They carry the Texas minimum: their liability pays $30,000 and stops. They have no assets worth pursuing.
With UIM at 30/60, your own coverage adds little above what they already paid, and roughly $110,000 of your loss is simply unrecovered.
With UIM at 100/300, your policy responds to the shortfall and the gap largely closes.
The difference in premium between those two elections is usually modest. Figures are illustrative; actual recovery depends on your policy terms and the facts of the claim.
Does using UM/UIM raise your rates?
The short answer: A not-at-fault claim shouldn't raise your rate, and Texas restricts using not-at-fault claims as grounds for non-renewal.
This worry stops people from using coverage they paid for, so it's worth addressing directly.
A UM/UIM claim is by definition a claim where someone else was at fault. Texas restricts insurers from using not-at-fault claims as a reason for non-renewal, and a not-at-fault accident generally should not produce a surcharge.
What does happen is that the claim appears in your history. If your premium moves after a not-at-fault claim, the most likely explanation is a fault determination recorded incorrectly rather than a carrier ignoring the rule — that's covered in car insurance after an accident, along with how to get coding corrected.
The practical advice: don't decline to use coverage you're paying for out of a fear that mostly isn't founded. Report the claim, keep your records, and check the next declarations page.
The bottom line
The short answer: Check your declarations page for UM/UIM today, and if it's missing, you rejected it in writing at some point and it never came back.
UM/UIM is cheap relative to what it does, it's the only part of your auto policy that exists purely to protect your own household, and Texas law is structured so you have it by default unless you actively signed it away.
Two actions worth taking this week. Find your declarations page and confirm UM and UIM appear on it. Then compare those limits to your bodily injury liability limits — and if the UM/UIM number is smaller, ask why.
Send me the page and I'll read it with you. I'm in Richardson, I do this in English and Spanish, and there's a $10 e-gift card just for letting me prepare the quote.
Last reviewed by Jaime Mendez on September 18, 2026. This guide is educational and is not legal advice or personalized insurance advice. Statutory requirements and policy terms change — confirm your own coverage with your carrier or a licensed agent, and consult an attorney about a specific claim. This guide is refreshed quarterly.
