phrase · also: UIM
underinsured motorist
In plain English
Coverage that pays you when you're hit by someone whose liability limits aren't enough to cover your damages.
If you have $500K of damages and the at-fault driver has $25K of liability coverage, UIM picks up the gap. Pairs with UM (uninsured motorist) — they're often listed together on the dec page.
What it covers
Bodily injury caused by an underinsured driver — pays the difference between the at-fault driver's available limits and your UIM limit.
What it does not cover
It does NOT pay 'on top of' the at-fault driver's limits in most states. Most are 'difference of limits' — your UIM limit minus what the other side paid.
Where it trips people up
States vary on whether UIM is 'difference of limits' or 'excess.' In a difference-of-limits state, $500K UIM minus $300K paid = $200K available. In an excess state, $500K UIM stacks on top of the $300K. Know which applies.
The technical version
Coverage for bodily injury caused by a motorist whose liability limits are insufficient to cover the insured's damages, calculated either as a difference of limits or as excess insurance depending on state law.