Updated July 2026
What Is Uninsured and Underinsured Motorist Coverage Insurance?
Uninsured motorist coverage pays when another driver causes an accident and either has no insurance or carries liability limits too low to cover your damages. It splits into two parts: uninsured motorist bodily injury covers your medical expenses, lost wages, and pain and suffering, while uninsured motorist property damage covers vehicle repair or replacement. Underinsured motorist coverage works the same way but kicks in when the at-fault driver has some insurance — just not enough to fully compensate you. Michigan law requires carriers to offer both coverages on every policy, but you can reject them by signing a written waiver.
- You're stopped at a red light when another driver rear-ends you. The other driver has no insurance. You have $8,000 in medical bills and $5,500 in vehicle damage. If you carry uninsured motorist bodily injury and property damage coverage, your policy pays both amounts after you meet any applicable deductible. Without this coverage, you pay out of pocket and can attempt to sue the at-fault driver — who likely has no assets to collect against.
- Another driver runs a stop sign and T-bones your car. They carry Michigan's minimum $50,000 bodily injury liability limit, but your medical bills and lost wages total $85,000. Their liability policy pays its $50,000 limit, and your underinsured motorist coverage pays the remaining $35,000. Without underinsured coverage, you absorb that $35,000 gap yourself.
- A driver sideswibes your car on the highway and flees the scene. You file a police report but the driver is never identified. Your uninsured motorist coverage treats this as an uninsured driver claim and pays your medical bills and vehicle damage. Collision coverage would also pay for the vehicle damage, but uninsured motorist property damage typically carries a lower deductible.
Who Needs Uninsured and Underinsured Motorist Coverage Insurance?
You should carry uninsured and underinsured motorist coverage if you cannot afford to pay medical bills or vehicle repair costs out of pocket after an accident caused by someone else. Michigan has one of the highest uninsured driver rates in the country, and the state's minimum liability limits leave large gaps when injuries are serious. If you finance or lease your vehicle, your lender may require this coverage as part of the loan agreement.
Compare the annual cost of uninsured motorist coverage to the amount you could pay out of pocket if hit by an uninsured driver. If one serious accident would create financial hardship, the coverage is worth carrying. If you reject it, confirm your health insurance covers auto accident injuries without exclusions and that you can replace your vehicle without a loan.
How Much Does Uninsured and Underinsured Motorist Coverage Insurance Cost?
Uninsured and underinsured motorist coverage typically adds $8 to $25 per month to a Michigan auto insurance policy, or roughly $95 to $300 annually.
- Coverage limits you select — higher bodily injury and property damage limits increase premium.
- Your county and ZIP code — areas with higher rates of uninsured drivers cost more to insure.
- Deductible on uninsured motorist property damage — a $250 deductible costs more than a $500 or $1,000 deductible.
- Claims history — prior uninsured motorist claims can raise your rate at renewal.
- Stacking election — if you insure multiple vehicles, stacking uninsured motorist limits across all vehicles increases cost but multiplies available coverage.