What Is 'No Insurance' Auto Insurance?
'No insurance' auto insurance, also called uninsured motorist coverage, protects you if you're involved in an accident where the other driver has no liability coverage or is underinsured. It's a safety net that helps cover medical bills, lost wages, and damages that the at‑fault driver can't pay.
- What Is 'No Insurance' Auto Insurance?
- How It Fits Into Your Policy
- Optional vs. Mandatory
- Coverage Limits
- When It's Needed
- Key Differences From Other Coverage Types
- How to Add 'No Insurance' Coverage
- Costs and Savings
- Common Misconceptions
- It Covers Your Own Car's Damage
- It Replaces Liability Coverage
- Practical Tips for Choosing Coverage
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How It Fits Into Your Policy
Optional vs. Mandatory
In many states, uninsured motorist coverage is optional, but some require a minimum amount. You can purchase it as part of a liability package or add it to an existing policy.
Coverage Limits
Limits are typically set per incident or per year and should match your medical and property needs. Common limits are $50,000 for bodily injury and $25,000 for property damage, but you can choose higher limits for added protection.
When It's Needed
Even if you're a safe driver, you could still face a claim if the other driver has no insurance. According to the Insurance Information Institute, about 8% of drivers in the U.S. are uninsured. Uninsured motorist coverage ensures you're not left footing the bill.
Key Differences From Other Coverage Types
| Coverage Type | Primary Focus | When It Applies |
|---|---|---|
| Uninsured Motorist (UM) | Pay for injuries/damages from an uninsured driver | Accident with uninsured or underinsured at‑fault driver |
| Underinsured Motorist (UIM) | Cover gaps when at‑fault driver's policy limits are insufficient | Accident with driver who has some coverage but not enough |
| Collision | Repair or replace your vehicle after any collision | Any collision, regardless of fault |
How to Add 'No Insurance' Coverage
- Contact your insurer and request a UM/UIM add‑on.
- Review state minimum requirements and choose limits that align with your health and vehicle values.
- Consider bundling with other coverages to save on premiums.
Costs and Savings
Adding uninsured motorist coverage typically increases your premium by 5-10%, but the potential out‑of‑pocket costs in a claim can be far higher. Many insurers offer a "no‑claim bonus" that can reduce the impact of a claim on future rates.
Common Misconceptions
It Covers Your Own Car's Damage
No; UM/UIM only covers injuries and damages caused by the at‑fault driver. Collision or comprehensive coverage is needed for your own vehicle.
It Replaces Liability Coverage
Not at all. Liability coverage protects others you may injure. UM/UIM protects you from an uninsured driver.
Practical Tips for Choosing Coverage
- Assess your medical expenses—if you have high deductibles or costly treatments, opt for higher limits.
- Check the uninsured driver rate in your state; higher rates may justify stronger coverage.
- Review your policy annually; as your health or vehicle value changes, adjust limits accordingly.