Uninsured Motorist Coverage - UM

AAA

DEFINITION of 'Uninsured Motorist Coverage - UM'

An addition to a standard automobile insurance policy that provides coverage in the event the other driver is both legally responsible for the accident and is not insured. Uninsured motorist coverage is required in some states, and optional in most others, and pays for injuries to the policy holder and his or her passengers, and in certain cases for damage to property. It is recommended to have UM coverage.

INVESTOPEDIA EXPLAINS 'Uninsured Motorist Coverage - UM'

An uninsured motorist is one who has no insurance, does not have insurance that meets state-required minimum liability amounts, or whose insurance company is unwilling or unable to pay the claim. A hit-and-run driver would also be considered an uninsured motorist. Without this coverage, a person holding a regular automobile insurance policy may not receive payments if they are involved in an accident where the other party is at fault and uninsured.

RELATED TERMS
  1. Uninsurable Risk

    A hazard or condition that has either a high likelihood of loss, ...
  2. Compensatory Damages

    Money awarded to a plaintiff to compensate for damages, injury, ...
  3. Comparative Negligence

    A principle of tort law that applies to casualty insurance in ...
  4. Umbrella Insurance Policy

    Extra liability insurance coverage that goes beyond the limits ...
  5. Insurance

    A contract (policy) in which an individual or entity receives ...
  6. Liability Insurance

    Any type of insurance policy that protects an individual or business ...
Related Articles
  1. Budgeting

    12 Car Insurance Cost-Cutters

    If car costs are dragging you down, find out how to free yourself from some of the extra weight.
  2. Insurance

    15 Insurance Policies You Don't Need

    Learn how to save money by saying "no" to unnecessary coverage.
  3. Options & Futures

    Beginner's Guide To Auto Insurance

    Find the perfect policy that suits both your coverage and budgetary needs.
  4. Options & Futures

    Top Tips For Cheaper, Better Car Insurance

    Accident, theft, vandalism - make sure your coverage will protect you when you need it most.
  5. Insurance

    The True Cost Of Owning A Car

    Driving is often the most convenient way to get around, but it'll cost you.
  6. Budgeting

    The Momentum, And Methods, Behind Walmart's Model

    Walmart's success stems from low costs, which are possible through specific supply and distribution strategies, and are passed to consumers as low prices.
  7. Trading Strategies

    Has Coca-Cola Lost Its Pop?

    Coca-Cola has been a name synonymous with sustainable success. This hasn’t just pertained to consumers but investors as well. But are times changing?
  8. Investing Basics

    Are dividend payout ratios different in different economic sectors?

    Discover which economic sectors have traditionally higher or lower dividend payout ratios and the various factors that determine payout ratios.
  9. Insurance

    How to Use a Waiver of Subrogation

    A waiver of subrogation means that a party to a contract waives the right to allow someone (usually an insurance company) to sue the other party to the contract in case of a loss.
  10. Retirement

    What is an equity-indexed annuity?

    Understand what an equity-indexed annuity is, its advantages and disadvantages, and how it differs from other annuity investments.

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center