By Bill Leversee | Reviewed 10/7/2025
One in three drivers on the road can’t fully cover the damage they cause. Here’s how to protect yourself.
Did you know that one in seven drivers on the road today is uninsured? Car insurance and auto insurance are required by law for anyone operating a motor vehicle, and being insured is essential for both legal and financial protection. Many drivers are uninsured or underinsured due to a variety of circumstances, such as financial hardship or misunderstanding policy requirements. Even more alarming, an estimated 2 in 7 drivers carry only the state-mandated minimum coverage. This means nearly a third of all vehicles on the road either have no coverage or don’t have enough to pay what they’re responsible for should they cause a serious automobile accident-and they’re putting you at risk.
Types of Insurance Coverage: The Basics You Need to Know
When it comes to protecting yourself and your vehicle, understanding the basics of insurance coverage is the first step toward peace of mind on the road. Car insurance and auto insurance aren’t just legal requirements-they’re essential tools for safeguarding your finances and your future in the event of an accident or unexpected event.
At its core, an insurance policy is a contract between you and your insurance company that outlines the types of coverage provided and the situations in which you’ll be protected. The most common types of car insurance coverage include:
- Liability Coverage: This is the foundation of most auto insurance policies. Liability coverage pays for bodily injury and property damage that you cause to others in an accident where you’re at fault. It’s required by law in most states and helps protect your assets if you’re sued after a car accident.
- Collision Coverage: Collision coverage helps pay for repairs to your own car if it’s damaged in an accident, regardless of who is at fault. Whether you hit another vehicle or an object, this coverage can help get you back on the road quickly.
- Comprehensive Coverage: Comprehensive coverage protects your vehicle from non-collision events, such as theft, vandalism, fire, or natural disasters. If your car is stolen or damaged by something other than a crash, comprehensive coverage can help cover the costs.
- Uninsured/Underinsured Motorist Coverage: As discussed throughout this article, this coverage steps in when the other driver doesn’t have enough insurance-or any at all-to pay for your injuries or property damage. It’s a crucial layer of protection, especially given how many drivers are uninsured or underinsured.
- Umbrella Policy: For those seeking extra peace of mind, an umbrella policy provides additional liability coverage beyond the limits of your standard auto insurance. This can be especially valuable if you’re involved in a serious accident with significant damage or injuries.
Each type of insurance coverage serves a specific purpose, and together, they create a safety net that can protect you, your passengers, and your vehicle from a wide range of risks. When choosing an insurance policy, consider your driving habits, the value of your car, and your financial situation to determine which coverages and limits make sense for you.
By understanding the basics of car insurance and auto insurance coverage, you can make informed decisions that help ensure you’re protected-no matter what the road throws your way. Don’t wait until after an accident to find out you don’t have enough insurance. Review your insurance policy regularly and talk to your insurance company or broker about the best options for your needs, including the benefits of adding an umbrella policy for even greater protection.
When Standard Coverage Isn’t Enough
Let’s assume you’re a responsible, insured driver with appropriate insurance coverage: liability protection for when you’re at fault, comprehensive coverage for damage to your own vehicle, and collision coverage for accidents. You’ve done everything right, and you have your own policy. But what happens if you’re involved in an accident with someone who doesn’t carry liability insurance or only has minimal coverage? In this case, your own policy may not be enough to cover all your losses if the other driver lacks sufficient coverage. You could be on the hook for vast sums of money, even if the accident wasn’t your fault. Additionally, the policyholder may still be responsible for paying a deductible before any insurance payment is made to cover the claim. All coverage is subject to the specific terms and conditions outlined in your insurance policy.
Liability coverage and liability insurance policies are designed to protect the insured driver, or policyholder, when they are at fault in an accident, covering damages to others up to the policy limits. However, these policies may not help you if the other driver is uninsured or underinsured, leaving you exposed to financial risk. If the other driver’s policy limits are too low or nonexistent, your own coverage, such as uninsured or underinsured motorist protection, may need to step in to cover the difference. When a claim is filed, payment is made to help cover your losses according to your policy terms. If a claim cannot be resolved through negotiation, a settlement may be reached to finalize the payment and close the claim.
Now what?
The Solution: Uninsured Motorist Coverage
A meaningful way to protect yourself is to add uninsured motorist coverage (UM coverage) to your auto policy. Uninsured motorist coverage is a part of your auto insurance policy that provides coverage when the other driver’s policy is lacking or nonexistent. UM coverage covers damages to you and your passengers for bodily injury, property damage, and lost income resulting from an accident caused by uninsured or underinsured drivers, including situations where the other driver’s policy limits are too low or in accidents involving a hit and run driver. UM coverage can also help when injuries or damages are the result of a vehicle caused accident by an uninsured or underinsured driver. If your car is declared a total loss after an accident with an uninsured or underinsured driver, UM coverage may help pay for the loss. Both UM and underinsured motorist (UIM) coverage provide coverage for accidents involving underinsured drivers, helping to fill the gaps left by the other driver’s policy.
The Underinsured Driver Problem
Beyond uninsured drivers, another significant risk is that 30% of drivers on the road have purchased bare-bones insurance to save money. Most states only require minimum coverage limits, which are pretty low. What if one of those drivers causes a serious accident and injures you or a family member?
Their $30,000 in total coverage will likely fall far short of covering your medical bills, lost income, and vehicle damage. Choosing higher limits for your UM/UIM coverage can provide greater financial protection in these situations.
For example, if the other vehicle’s driver is underinsured and causes an accident, the injured party may need to recover damages from their own insurer through UIM coverage to be fully compensated.
This is where underinsured motorist coverage (UIM coverage) comes in. By purchasing UIM coverage, you won’t be left holding the bill for a disaster caused by someone else. UIM coverage ensures that the injured person is paid for their losses, even when the at-fault driver’s insurer cannot cover the full amount. Increasing your coverage may raise your premium, but some insurers offer discounts that can help offset the cost of higher coverage limits. Insurers may have different time period requirements for filing a claim, so it is important to gather information about the accident and the other vehicle as soon as possible. The injured party should gather information at the scene to support their claim.
Bodily Injury and Property Damage: What’s Really at Stake
When you’re involved in a car accident, the financial and personal consequences can be overwhelming-especially if the other driver is uninsured or underinsured. In these situations, the stakes are high, and having the right insurance coverage can make all the difference.
Bodily injury refers to the physical harm you or your passengers may suffer in a crash. This can mean anything from minor cuts and bruises to serious injuries requiring surgery, rehabilitation, or even long-term care. The costs add up quickly: medical expenses, hospital bills, and lost wages if you’re unable to work. If the at-fault driver doesn’t have enough insurance-or any at all-uninsured motorist bodily injury coverage and underinsured motorist coverage step in to help pay for these expenses, so you’re not left footing the bill for someone else’s negligence.
Property damage is another major concern. Your car might need extensive repairs, or it could be totaled altogether. Uninsured motorist property damage coverage can help cover the cost of car repairs or replacement if the at-fault driver can’t pay. Property damage liability coverage pays for damage to other people’s property, such as cars, fences, or buildings, and in Illinois, the minimum required limit is $20,000 per accident. However, not all states offer this coverage, and there may be limits on how much your insurance company will pay, so it’s important to review your insurance policy and understand your options.
Liability insurance is designed to cover bodily injury and property damage when you’re at fault, but if the other driver is responsible and doesn’t have enough insurance, your own uninsured motorist coverage and underinsured motorist coverage become essential. These coverages can help pay for your medical bills, car repairs, and even lost wages, ensuring you’re protected no matter who is at fault.
Other coverages, like collision coverage and personal injury protection (PIP), can also provide valuable support. Collision coverage helps pay for car repairs regardless of who caused the accident, while PIP can help cover medical expenses and lost income for you and your passengers.
If you’re ever in an accident with an uninsured or underinsured driver, or involved in a hit-and-run accident or phantom vehicle incident, it’s crucial to gather as much information as possible-driver details, insurance information, vehicle description, and witness statements. Always report the accident to the police and your insurance company promptly to protect your right to file a claim. If a dispute arises over a claim and cannot be resolved through negotiation or arbitration, the matter may be taken to court for resolution.
Ultimately, the costs of bodily injury and property damage can be significant, and relying on the other driver’s policy may not be enough-especially if the other driver’s policy limits are too low or nonexistent. In these cases, your own uninsured motorist coverage and underinsured motorist coverage become essential to fill the gap and protect you from unexpected expenses. By making sure you have adequate uninsured motorist coverage and underinsured motorist coverage, you can protect yourself from unexpected expenses and ensure you get the compensation you deserve. Take the time to review your insurance coverage, understand your liability limits, and consider adding or increasing your UM and UIM coverages for greater peace of mind on the road.
What to Do After an Accident with an Uninsured Driver
Being involved in a car accident is stressful enough, but discovering the other driver is uninsured or underinsured can make the situation even more complicated. Knowing exactly what to do in these moments can help protect your rights and ensure you get the insurance coverage you need.
First and foremost, prioritize safety. Check yourself and your passengers for injuries and seek medical attention immediately if needed. Even if injuries seem minor, it’s important to get checked out, as some symptoms may appear later. Once everyone is safe, gather information at the scene. Collect the other driver’s contact details, vehicle information, and take clear photos of the accident scene, vehicle damage, and any visible injuries. Even if the other driver is uninsured, documenting everything is crucial for your insurance claim.
If your vehicle is disabled after an accident, roadside assistance is a valuable service to request so you can quickly get back on the road.
Next, notify your insurance company as soon as possible. Let them know you’ve been in an accident with an uninsured or underinsured driver. If you have uninsured motorist coverage (UM coverage) as part of your car insurance policy, you can file a claim to help cover your medical expenses, car repairs, and other damages. This coverage is designed to step in when the at fault driver doesn’t have liability insurance or enough coverage to pay for your losses.
If the other driver has some insurance but not enough to cover all your costs, your underinsured motorist coverage (UIM coverage) can help pay the difference between the at-fault driver’s liability limits and your total expenses, up to your policy’s limits. Understanding your insurance policy-including liability insurance, collision coverage, and personal injury protection (PIP)-will help you navigate the claims process and know what expenses are covered.
It’s also important to be aware of your state’s laws regarding uninsured and underinsured motorist coverage. Some states require these coverages, while others make them optional. Knowing your rights and the specifics of your insurance policy can make a big difference in how you handle the aftermath of a car accident with an uninsured or underinsured driver.
If you don’t have uninsured or underinsured motorist coverage, you may need to rely on other coverages, such as collision coverage for car repairs and PIP for medical bills. However, without UM/UIM coverage, you could face significant out-of-pocket expenses. Trying to recover costs directly from an uninsured or underinsured driver can be difficult and often unsuccessful.
In complex situations, consulting with an attorney who specializes in car accidents and insurance claims can be invaluable. They can help you understand your legal options, including the possibility of pursuing the at-fault driver, and guide you through the process of filing claims with your insurance company.
After an accident, you can review your coverage or get a quote online to ensure you have adequate protection for the future. Obtaining an auto quote can help you compare different coverage options and make informed decisions about your policy. Remember, your driving behavior can impact your insurance rates and coverage options, so practicing safe driving habits not only reduces the risk of future accidents but can also help lower your insurance costs. Ultimately, being prepared and knowing what steps to take after an accident with an uninsured or underinsured driver can make a significant difference in your ability to recover damages and manage the financial impact. Ensuring you have the right car insurance coverage-including uninsured motorist coverage and underinsured motorist coverage-is a proactive way to protect yourself from the unexpected on the road.
Maximize Your Protection: Adding Uninsured Motorist Coverage to Your Umbrella Policy
While standard auto insurance policies typically offer Uninsured Motorist coverage with limits of $250,000 or $500,000 per accident, this may not be sufficient if you’re involved in a serious collision with an uninsured driver. Consider this scenario: you carry a $1,000,000 liability umbrella to protect your assets, yet you could be left underinsured if an uninsured motorist causes catastrophic injuries to you or your family.
To close this protection gap, many insurance professionals recommend securing an additional $1,000,000 in Uninsured Motorist coverage alongside your liability umbrella. This ensures your coverage is balanced-protecting both your assets from lawsuits and your family’s recovery if an at-fault driver has no insurance.
It’s important to note that not all carriers offer the option to add Uninsured Motorist coverage to umbrella policies. When shopping for coverage, ask specifically about this endorsement to ensure you’re getting comprehensive protection on both sides of the equation.
Take Action Today
Contact your broker today to learn more about UM and UIM coverages and make sure you don’t get stuck paying for someone else’s mistake. When nearly a third of drivers can’t adequately cover the damage they might cause, protecting yourself with the right coverage isn’t just smart, it’s essential.
Questions about this page? Email us at hello@falconwest.com
Questions about this page? Email us at hello@falconwest.com
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