Do I need uninsured motorist coverage? The hidden risks to you when others drive without adequate insurance

Overview: Driving without adequate car insurance can expose you to significant financial and legal consequences. If you’re involved in a crash caused by an uninsured or underinsured driver, and you don’t carry uninsured motorist (UM) or underinsured motorist (UIM) coverage, you could be responsible for paying medical bills and lost wages out of pocket. Additionally, if you don’t maintain the liability insurance required by your state, you may face legal penalties such as fines, license suspension or vehicle impoundment. If your state offers uninsured motorist property damage (UMPD) coverage, it may be a good idea to carry it even if not required, as it helps cover vehicle repair costs when the at-fault driver lacks insurance. This article explores the hidden dangers of insufficient coverage and how the right insurance coverages can help safeguard your finances.

Why adequate coverage matters

Many drivers view car insurance as just another monthly expense. However, over 15% of drivers were uninsured across the U.S. in 2023, according to a 2025 Insurance Research Council (IRC) study. Millions more carry only the state minimum limits, which may not be enough to pay for all damages after a serious accident. Because some drivers may lack sufficient insurance, it’s important to carry adequate UM and UIM coverage.

This is why asking, “Do I need uninsured motorist coverage?” is so important. UM, UIM and UMPD insurance are designed to help protect you financially if you’re hit by someone who can’t pay for the medical costs or damage they cause.

Key risks and potential hidden costs

This table shows the major risks and hidden costs of driving without sufficient insurance, including UM/UIM coverage:

Let’s take a deeper dive into these three risks:

Risk # 1: Crash costs after an uninsured driver hits you

If you are hit by an uninsured driver and lack UM/UIM coverage, you may have to pay your own medical bills, lost wages and vehicle repair costs. Health insurance may cover some medical expenses, but deductibles and uncovered costs can be expensive. UM bodily injury coverage can help with these costs. Depending on your state, Personal Injury Protection (PIP) or Medical Payments Coverage (MPC or Med Pay) may also help cover medical bills and lost wages regardless of fault. Without UMPD or collision coverage, you’d be responsible for vehicle repairs caused by an uninsured driver. Collision and comprehensive coverage help cover damage to your vehicle regardless of fault, so consider discussing these options with your agent.

Risk # 2: Gaps created when relying on minimum liability limits

Many states only require minimal liability insurance. If you purchase only the state minimum limits and cause an accident, your insurance might not fully cover the costs, potentially leaving you personally responsible for the remaining damages. Similarly, if you’re hit by someone who has only minimum coverage, you could face unpaid medical bills or repairs. Carrying higher-than-minimum limits and UM, UIM and UMPD (where available) protection is recommended.

Risk # 3: Legal consequences of driving uninsured

Driving without the liability insurance required by your state is illegal and risky. Penalties may include heavy fines, license and registration suspension, possible vehicle impoundment and lasting financial consequences. While UM coverage isn’t legally required in most states, it’s an important option to help protect yourself financially if you’re involved in an accident with a driver who doesn’t have insurance. Having at least the required liability coverage can help you avoid legal trouble, and adding UM coverage can help safeguard your finances.

How UM/UIM helps protect you

UM coverage helps pay for injuries if an at-fault driver has no insurance. UIM coverage helps when the at-fault driver’s insurance isn’t enough to cover your costs.

Always check your policy and speak with your agent about your state’s rules, as UIM can vary between “difference in limits” and “difference in damages” coverage.

There are two types of UIM coverage:

• Difference in limits — pays the difference between the at-fault driver’s insurance limits and your UIM limits.
• Difference in damages ­— pays the difference between the at-fault driver’s insurance and the total damages you incur, up to your UIM policy limit(s).

UMPD pays for damage to your vehicle after an accident caused by a driver without insurance, but is not available in all states.

Help protect your financial future

Car insurance is more than an expense — it may be vital protection against the financial risks of uninsured motorists and other unexpected costs. Regularly review your coverage with your agent to help ensure you’re protected from these risks.

UM, UIM and UMPD coverage can help provide important financial protection against accidents caused by uninsured and underinsured drivers.

To learn more about your insurance options and risks of inadequate coverage, talk to one of our agents and get a quote online. Helping protect your future starts with having the coverage you need.