Updated July 2026
What Is Uninsured and Underinsured Motorist Coverage Insurance?
Uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) protect you when the at-fault driver either has no liability insurance or carries limits too low to cover your damages. UM pays when the other driver is completely uninsured or flees the scene in a hit-and-run. UIM kicks in when the other driver has insurance but their liability limit is exhausted before your medical bills and repair costs are fully covered. Both coverages apply only when the other driver is legally at fault for the collision.
- You're stopped at a red light and hit from behind by a driver with no insurance. You have $8,000 in medical bills and $5,500 in vehicle damage. The at-fault driver has no coverage to pay your claim. Your uninsured motorist property damage coverage pays the $5,500 repair bill minus your deductible, and your uninsured motorist bodily injury coverage pays the $8,000 in medical costs up to your policy limit.
- A driver with Tennessee's minimum $25,000 bodily injury limit runs a stop sign and T-bones your car. You suffer injuries requiring $60,000 in medical treatment. The at-fault driver's liability insurance pays their $25,000 limit, leaving you $35,000 short. If you carry underinsured motorist coverage with a $50,000 limit, your policy pays the remaining $35,000, covering the gap the other driver's insurance left.
- Your parked car is sideswiped overnight and the driver flees without leaving information. You file a police report but the driver is never found. Your uninsured motorist property damage coverage treats this as a hit-and-run claim and pays for the $4,200 in body panel and paint repairs, minus your deductible, because the at-fault driver is uninsured by default.
Who Needs Uninsured and Underinsured Motorist Coverage Insurance?
This coverage makes sense if you cannot afford to pay out-of-pocket for medical bills or vehicle repairs after an accident caused by someone else. It's particularly valuable in Tennessee, where roughly 16% of drivers carry no insurance and many others carry only the state's low minimum liability limits. If you're financing a vehicle, your lender may require uninsured motorist property damage coverage even though the state does not.
Compare the annual cost of UM/UIM coverage to the financial hit you'd take if an uninsured driver totaled your car or sent you to the emergency room. If one accident would drain your savings or force you into debt, the $100 to $200 annual cost is justified. If you have the liquidity to cover a $10,000 to $30,000 loss without financial stress, you're effectively paying to transfer a risk you can afford to keep.
How Much Does Uninsured and Underinsured Motorist Coverage Insurance Cost?
Uninsured and underinsured motorist coverage typically adds $8 to $18 per month to a Tennessee auto insurance policy, or roughly $95 to $215 annually, depending on the limits you select.
- Your selected UM/UIM limits — higher limits cost more, but the incremental cost from $25,000 to $50,000 is often under $5 per month.
- Whether you add uninsured motorist property damage coverage separately or rely on collision coverage for vehicle repairs.
- Your county's uninsured driver rate — counties with higher percentages of uninsured motorists see slightly higher UM premiums due to increased claim frequency.
- Stacking election — choosing stacked UM/UIM coverage, which multiplies your limit by the number of vehicles on your policy, costs 30% to 60% more than non-stacked coverage.
- Your own driving record and claims history — carriers price UM/UIM based partly on your likelihood of filing any claim, not just UM-specific risk.