Question: I live in Texas, and uninsured underinsured motorist coverage is not required. What is the difference between uninsured/underinsured motorist and collision coverage? If I did not have UIM/UM and was involved in an accident with someone who did not have insurance and was at fault, can’t I use collision to cover the expenses? If you have collision on your policy, why do you need UIM/UM?
Answer: In Texas, uninsured motorist/underinsured motorist (UM/UIM) coverage covers bodily injury and property damage. Texas drivers are not required to purchase these coverages. If you do reject it, it must be in writing.
These UM/UIM coverages pay your expenses from an accident caused by an uninsured motorist or if the other driver did not have enough insurance to cover your bills up to your policy’s dollar limits. It also pays for accidents caused by a hit-and-run driver if you report the accident promptly to the police.
Bodily injury UM/UIM pays without deductibles for medical bills, lost wages, pain and suffering, disfigurement, and permanent or partial disability.
Property damage UM/UIM pays for auto repairs, a rental car, and damage to items carried in your car. There is an automatic $250 deductible. This means you must pay up to $250 for the repairs yourself.
A UM/UIM policy would cover you, your family members, passengers in your car, and others driving your car with your permission.
Collision insurance covers repairing or replacing your car after an accident, regardless of who was driving or who was at fault. Payment is limited to your car’s actual cash value minus your deductible. Actual cash value is the market value of a car like yours before it was damaged and is paid if your car is declared to be a total loss.
Here’s what you need to know about uninsured motorist coverage.
You are correct that if you have collision coverage, you may not need UM/UIM property damage since you could put a claim in through your collision coverage if an uninsured motorist hits your vehicle. This policy might be helpful if the at-fault party is underinsured.
If the other driver’s policy would not cover all of your auto repairs, you could file a claim against your UM/UIM coverage for the difference (minus your deductible) between the damage to your car and what the other driver’s policy will pay.
There is also the bodily injury portion of UM/UIM policy. If you were injured in an accident and the other driver’s insurance would not cover all your medical bills, you could file a claim against your uninsured/underinsured motorists (UM/UIM) coverage.
If you have collision coverage and personal injury protection (PIP) — or if your health insurance would pay medical bills if you were in an accident with an uninsured or underinsured motorist — you may not need UM/UIM coverage. It is a personal choice dependent upon your own situation and what auto insurance coverages you already have beyond the required TX liability insurance.
— Michelle Megna contributed to this story.
Ask the Insurance Expert
Laura Longero
Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.
Ask the Insurance Expert
John McCormick
Editorial Director
John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.
Ask the Insurance Expert
Leslie Kasperowicz
Managing Editor
Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.
Ask the Insurance Expert
Nupur Gambhir
Managing Editor
Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.
