How Much Can I Get from An Underinsured Motorist Claim?

UIM coverage is designed to bridge the gap between the at-fault driver’s policy limits and the actual cost of your damages.

Understanding how UIM claims work and what influences settlement values can help you maximize your compensation.

This guide breaks down the key factors that impact your payout, how to file a UIM claim, and what to expect during the negotiation process.

Underinsured Motorist Coverage Explained

Underinsured Motorist coverage is designed to protect you when the at-fault driver’s insurance policy isn’t enough to cover your medical bills, lost wages, and other damages after a car accident.

Many drivers carry only the minimum required liability insurance, which may fall short in serious accidents.

With UIM coverage, your own insurance steps in to cover the difference between the at-fault driver’s policy limit and the actual cost of your injuries—up to your policy’s UIM limit.

For example, if the other driver’s insurance covers $25,000, but your damages total $75,000, your UIM policy can cover the remaining $50,000 (if your limit is high enough).

UIM coverage is optional in some states but required in others.

It’s often bundled with Uninsured Motorist (UM) coverage, which applies when the at-fault driver has no insurance at all.

Having UIM coverage can prevent financial hardship if you’re hit by a driver with inadequate insurance.

Factors That Affect How Much You Can Get From an Underinsured Motorist Claim

The amount you receive from a UIM claim depends on several key factors, including the severity of your injuries, policy limits, and how well your claim is documented.

Here’s what impacts your settlement:

1. The At-Fault Driver’s Insurance Policy Limits

Your UIM claim only covers the difference between the at-fault driver’s liability coverage and your total damages.

If their policy limit is $25,000 and your damages are $75,000, your UIM coverage would apply to the remaining $50,000, up to your policy’s limit.

2. Your UIM Policy Limits

The amount you can recover is capped by your own UIM coverage.

If your policy has a $50,000 limit, but your total damages exceed that, you won’t be able to recover anything beyond your coverage.

3. Severity of Your Injuries

More severe injuries, such as spinal damage, broken bones, or traumatic brain injuries, lead to higher medical expenses, ongoing treatment costs, and larger settlements.

Soft tissue injuries or minor whiplash typically result in lower payouts.

4. Medical Expenses and Future Treatment Costs

Your UIM claim should cover both past and future medical costs, including hospital bills, surgeries, physical therapy, and ongoing pain management.

A higher total in medical expenses generally leads to a larger settlement.

5. Lost Wages and Loss of Earning Capacity

If your injuries prevent you from working temporarily or permanently, you can claim compensation for lost income.

Cases involving long-term disability or career impact often receive larger settlements.

6. Pain and Suffering Damages

Non-economic damages like pain, emotional distress, and reduced quality of life factor into your UIM settlement.

Insurance companies use multipliers based on injury severity to calculate these damages.

7. State Laws and Policy Regulations

Some states require insurers to stack UIM coverage across multiple policies, increasing potential payouts.

Others impose setoff rules, which reduce your UIM payout by the amount already received from the at-fault driver’s insurance.

8. Strength of Your Claim and Evidence

Detailed medical records, accident reports, witness statements, and proof of damages help maximize your claim.

Insurance companies are more likely to offer higher settlements when strong evidence supports the injury’s severity.

9. Negotiation and Legal Representation

Insurance companies often start with low offers. If you have an attorney or use an AI-powered claims helper like Mighty.com, you may negotiate a better settlement by presenting a stronger case.

Which States Require UIM?

Uninsured Motorist and Underinsured Motorist coverage requirements vary across the United States.

Currently, 20 states and the District of Columbia require UM and/or UIM coverage for all drivers

Some of these states include:

• Connecticut
• District of Columbia
• Illinois
• Kansas
• Maine
• Maryland
• Massachusetts
• Minnesota
• Missouri
• Nebraska
• New Hampshire
• New York
• North Carolina
• North Dakota
• Oregon
• South Carolina
• Vermont
• Virginia
• West Virginia
• Wisconsin

The True Value of Uninsured Motorist Coverage

Uninsured Motorist (UM) coverage provides essential financial protection when you're involved in an accident with a driver who has no insurance.

Without it, you could be left paying out-of-pocket for medical bills, lost wages, and other damages.

Here’s the value it offers:

1. Covers Medical Expenses

UM coverage helps pay for hospital bills, surgeries, rehabilitation, and ongoing medical care if you're injured by an uninsured driver.

This is especially valuable if you don’t have health insurance or have high deductibles.

2. Replaces Lost Wages

If your injuries prevent you from working, UM coverage can compensate you for lost income.

Some policies even cover loss of future earning capacity¹ if your injuries cause long-term disability.

3. Pays for Pain and Suffering

Unlike standard health insurance, UM coverage includes non-economic damages like pain, emotional distress, and reduced quality of life.

This can significantly increase your compensation after a serious accident.

4. Protects Against Hit-and-Run Accidents

If you’re the victim of a hit-and-run, UM coverage steps in to cover your injuries, assuming the at-fault driver is unknown or uninsured.

Without it, you might have no way to recover damages.

5. Fills the Gap When the At-Fault Driver Can’t Pay

Even if you sue an uninsured driver, they may lack the personal assets to cover your damages.

UM coverage ensures you receive compensation without relying on the at-fault driver’s financial situation.

6. Affordable Protection

UM coverage is relatively low-cost compared to the financial burden of paying for accident-related expenses on your own.

It’s often bundled with Underinsured Motorist (UIM) coverage, providing even broader protection.

7. Works Even If You’re a Pedestrian or Cyclist

Many policies cover injuries sustained while walking, biking, or riding in someone else’s car, ensuring protection outside your own vehicle.

Why It’s Essential

With about 1 in 3 drivers in the U.S. being uninsured or Underinsured², according to the Insurance Research Council, UM coverage is a smart financial safety net that helps prevent devastating out-of-pocket expenses after an accident.

Filing an Underinsured Motorist Claim

Filing a UIM claim involves multiple steps to ensure you receive fair compensation when the at-fault driver’s insurance isn’t enough to cover your damages.

Here’s the process:

1. Confirm the At-Fault Driver’s Insurance Limits

Before filing a UIM claim, you must prove that the at-fault driver’s liability coverage is insufficient.

This typically requires obtaining their insurance policy details and confirming their coverage limits.

2. Notify Your Insurance Company

Contact your insurance provider as soon as possible to report the accident and inform them that you may need to file a UIM claim.

Many policies have deadlines for initiating a claim, so acting quickly is crucial.

3. Gather Evidence to Support Your Claim

Strong documentation helps maximize your settlement.

Collect:

• The police report
• Medical records and bills
• Photos of the accident scene and injuries
• Statements from witnesses
• Proof of lost wages (pay stubs, employer letters)

4. Exhaust the At-Fault Driver’s Insurance Policy

Before your UIM coverage applies, you must receive the full payout from the at-fault driver’s insurance. This is known as exhausting their policy limits.

Your insurer will require proof, usually in the form of a letter from the at-fault driver’s insurer confirming that the maximum amount has been paid.

5. File Your UIM Claim

Once the at-fault driver’s coverage is exhausted, submit a formal UIM claim to your insurance provider.

This includes:

• ‍A demand letter outlining your damages‍
• Documentation of your medical expenses, lost income, and pain and suffering
• Proof that the at-fault driver’s insurance was insufficient

6. Negotiate with Your Insurance Company

Your insurer will review your claim and may offer a settlement. Initial offers are often low, so be prepared to negotiate.

You may need to provide additional medical documentation or expert testimony to justify your claim’s value.

7. Consider Legal Help if Needed

If your insurer refuses to offer a fair settlement, you may need a personal injury attorney to negotiate on your behalf or file a lawsuit against your insurance company for bad-faith handling of your claim.

8. Receive Your Settlement

Once you reach an agreement, you’ll sign a release of claims, and your insurer will issue your payment.

The entire process can take weeks to months, depending on the complexity of your case and the willingness of your insurer to negotiate.

Frequently Asked Questions

Can I claim the full value of my UIM coverage?

Not always. Your Underinsured Motorist coverage limit is the maximum you can receive, but you can only claim what your actual damages justify.

Before your UIM coverage applies, you must exhaust the at-fault driver’s insurance. For example, if they have $25,000 in coverage and your damages total $75,000, your UIM policy could cover the remaining $50,000, but only if your policy limit allows it.

Some states have "setoff" rules, meaning your insurer may subtract what you received from the at-fault driver’s policy from your UIM limit. 

Additionally, strong evidence of medical expenses, lost wages, and pain and suffering is required to justify a full payout.

If your damages exceed your UIM limit, you may need to explore other legal options, such as suing the at-fault driver directly.

Can you file an underinsured motorist claim if you were partially at fault?

Yes, you can file a UIM claim even if you were partially at fault, but your ability to recover compensation depends on your state’s negligence laws.

Comparative negligence states: In most states, you can still receive UIM benefits, but your settlement may be reduced based on your percentage of fault. 

For example, if you were 30% at fault and your damages total $100,000, your payout could be reduced to $70,000.

Modified comparative negligence states: If you were more than 50% or 51% at fault (depending on the state), you may be barred from recovering any compensation.

Contributory negligence states: In a few states, if you are even 1% at fault, you cannot file a claim.

Your insurance company may still challenge your claim, so strong evidence and legal guidance can help maximize your payout.

Are Hit & Run Accidents Covered by Underinsured Motorist Coverage?

No, Underinsured Motorist coverage typically does not cover hit-and-run accidents. Instead, Uninsured Motorist coverage is what applies when the at-fault driver is unknown or has no insurance.

Since a hit-and-run driver is legally considered "uninsured," UM bodily injury (UMBI) coverage can help pay for medical expenses, lost wages, and pain and suffering. 

Some policies also include UM property damage (UMPD) to cover vehicle repairs.

However, UIM coverage is designed for cases where the at-fault driver is identified but lacks enough insurance to fully cover your damages. 

If you have UM coverage, it’s crucial to report the hit-and-run accident to your insurer and law enforcement promptly, as many policies require timely notice to qualify for benefits.

Do I Need a Lawyer for An Underinsured Motorist Claim?

Not necessarily. While some complex underinsured motorist claims may benefit from legal representation, many claims can be handled without a lawyer—especially with the right tools.

Mighty.com’s AI claims helper simplifies the process by guiding you through filing, documenting, and negotiating your claim.

It helps you gather medical records, calculate damages, and communicate effectively with your insurance company, all without giving up a percentage of your settlement in legal fees.

Insurance companies may offer low settlements, but with AI-powered assistance, you can build a strong case and negotiate confidently.

If your claim is straightforward, using Mighty.com can save you time and money while still maximizing your compensation.

However, if your insurer acts in bad faith or denies a valid claim, you can always consult a lawyer later.

Is Underinsured Motorist Coverage Required?

It depends on the state. Underinsured Motorist coverage is not required nationwide, but some states mandate it, while others require insurers to offer it as an option.

In states like Connecticut, Maine, Maryland, Massachusetts, Minnesota, New York, North Carolina, North Dakota, Oregon, South Dakota, Vermont, Virginia, West Virginia, and Washington, D.C., UIM coverage is either required or must be offered.

However, in most states, drivers can decline it in writing.

Even if it’s optional, UIM coverage is highly recommended. Many drivers carry only the minimum required liability insurance, which may not be enough to cover serious injuries after an accident.

Without UIM, you could be left paying out-of-pocket for medical bills, lost wages, and long-term care if the at-fault driver’s insurance isn’t sufficient.

Check your state laws and insurance policy to determine if UIM coverage is included or required.

Will filing an underinsured motorist claim raise my insurance rates?

In most cases, filing an Underinsured Motorist claim should not raise your insurance rates, since the accident was not your fault.

Insurance companies typically increase premiums for at-fault claims, but UIM claims are meant to protect you when the other driver lacks sufficient coverage.

However, some insurers may still raise rates depending on state laws, company policies, and your overall claims history.

If you've filed multiple claims in a short period, your insurer might view you as a higher risk and adjust your premiums accordingly.

To understand how your provider handles UIM claims, review your policy terms or contact your insurer.

If you experience an unfair rate increase, consider shopping for a new policy to get better coverage at a lower cost.

Sources

1. Oasinc - How Does Loss of Earnong Capacity Differ From Loss of Future Earnings? (https://www.oasinc.org/how-does-loss-of-earning-capacity-differ-from-loss-of-future-earnings)
2. Insurance Research Council - Uninsured and Underinsured Motorists (2017 - 2013) (https://www.insurance-research.org/sites/default/files/downloads/PR%20_IRC%20%20Uninsured-Underinsured%20Motorist.pdf)