What UM and UIM Coverage Actually Are

Uninsured Motorist (UM) coverage pays your damages when the at-fault driver has no insurance, can’t be identified (hit and run), or whose insurance company is insolvent.

Underinsured Motorist (UIM) coverage pays the difference between the at-fault driver’s policy limit and your actual damages. If the at-fault driver carries the Arizona state minimum of $25,000 per person and your damages are $80,000, your UIM coverage covers the $55,000 gap (up to your UIM policy limit).

Both UM and UIM are added to your auto policy as separate coverage, paid for as part of your premium. In Arizona, insurers must offer it but you can decline in writing.

Why UM/UIM Matters So Much in Arizona

Arizona’s minimum insurance requirement is 25/50/15: $25,000 per person for bodily injury, $50,000 per accident, and $15,000 for property damage. These limits have not been meaningfully increased since the 1970s. Modern medical costs blow through them in days.

A single ambulance ride and overnight hospital stay in Arizona often exceeds $20,000. Surgery for a moderate injury can run $50,000-$150,000. Lifetime care for a serious brain or spine injury can exceed $1 million. The state minimum policy doesn’t come close.

The Insurance Information Institute estimates roughly 12% of Arizona drivers are uninsured — among the higher rates in the country. Many more carry only the state minimum. Without UM/UIM on your own policy, a serious accident with one of these drivers leaves you with no insurance recovery.

How a UM Claim Works After an Arizona Accident

When an uninsured driver hits you, the process looks like this:

1. Document the accident as you would any crash — police report, photos, witness info, medical care

2. Confirm the at-fault driver has no insurance (or cannot be identified, in a hit-and-run)

3. Notify your own insurer that you are filing a UM claim under your policy

4. Your insurer assigns an adjuster to your UM claim

5. You provide medical records, lost wage documentation, and a damage statement

6. Your insurer either offers settlement or denies the claim

The critical thing to know: your own insurer is now the adverse party. The adjuster handling your UM claim works for the insurer, not you. They will look for ways to reduce or deny the claim. Many people are surprised by this — they assume their own insurance company is on their side.

UIM Claims After a Settlement With the At-Fault Driver

A UIM claim works slightly differently. You first settle with the at-fault driver’s insurer for their policy limits (or as much as that policy will pay). Then you file a UIM claim with your own insurer for the difference between what the at-fault driver paid and your actual damages.

Most UIM policies have a “consent to settle” provision — you must get your own insurer’s permission before settling with the at-fault driver, or the UIM coverage may be voided. This is a procedural trap that catches DIY claimants. An Arizona attorney handles the consent-to-settle process correctly.

Stacking and Multiple Vehicles

Arizona generally allows “stacking” of UM/UIM coverage across multiple vehicles on the same policy. If you have two cars insured with $50,000 UM each, you may be able to combine them for $100,000 of available UM coverage.

Whether stacking applies depends on your specific policy language. Some Arizona insurers have included anti-stacking clauses that have been challenged in court with mixed results.

What If You Don’t Have UM/UIM?

If the at-fault driver was uninsured and you don’t have UM coverage, your options are limited:

• Sue the at-fault driver personally (often pointless if they have no assets)
• Pursue any other liable party (employer if the driver was working, vehicle owner if different from driver)
• Use your own health insurance for medical bills
• File a Crime Victims Compensation claim if the driver was DUI or fleeing

None of these are great options. This is why we tell every Arizona driver: carry UM/UIM, even if it adds $20-40/month to your premium.

What This Means for Your Case

If you were hit by an uninsured driver in Arizona, the analysis goes immediately to your own UM coverage. If you were hit by a driver with low limits and your damages exceed those limits, the analysis goes to your UIM coverage.

Either way, your own insurance company is now the party paying the claim — and they will defend the case like any insurer. Having an Arizona car accident attorney who knows how to handle UM/UIM claims, including the consent-to-settle requirements and stacking arguments, makes the difference between a fair recovery and a denied claim.

This article provides general information about Arizona law and is not legal advice. Every case is fact-specific. For advice on your particular situation, contact an Arizona-licensed attorney.