What UM and UIM pay
No-fault PIP pays your medical bills and wage loss no matter who caused the crash. It never pays for pain and suffering, and it stops at your PIP limits and the three-year wage loss period. Those losses come from the at-fault driver’s bodily injury coverage. UM and UIM cover the gap when that coverage is missing or too small.
| Coverage | When it applies |
|---|---|
| Uninsured motorist (UM) | The at-fault driver had no liability insurance, or was a hit-and-run driver who was never identified |
| Underinsured motorist (UIM) | The at-fault driver had liability insurance, but its limits are less than your damages |
Since July 2, 2020, Michigan liability policies default to $250,000 per person and $500,000 per accident, but drivers may choose limits as low as $50,000 and $100,000 (MCL 500.3009). A serious injury can easily exceed $50,000, which is why UIM matters. See how much insurance the other driver has.
Your policy is the rulebook
In Rory v Continental Insurance (2005), the Michigan Supreme Court held that UM coverage “is optional” and “not compulsory coverage mandated by the no-fault act.” Its rights and limits are purely contractual. The Court enforced a one-year deadline to sue written into the policy, even though the statute of limitations for a suit against the driver is three years. Courts will not rewrite a clear policy term because it seems unreasonable.
Read your full policy, not only the declarations page, for these terms:
- Notice. How soon you must tell the insurer about a UM or UIM claim.
- Suit deadline. How long you have to sue or demand arbitration. It may be one year from the crash.
- Physical contact. Whether a hit-and-run vehicle must have touched you or your car. See hit-and-run crashes.
- Consent to settle. Whether you need the insurer’s written permission before accepting the at-fault driver’s limits.
- Setoffs. Whether the policy subtracts what you received from the at-fault driver, or from other sources, from what it pays.
- Who is covered. Many policies cover resident relatives and anyone occupying an insured car.
Your policy’s clock may be the shortest one. A UM or UIM claim can be lost months before the three-year statute runs. Report the claim to your insurer in writing as soon as you know the other driver is uninsured, unidentified or underinsured, and check the suit deadline the same day.
How a claim is proven
Most policies promise to pay what you are “legally entitled to recover” from the uninsured or underinsured driver. That puts you in the position of suing a driver, except the defendant is your own insurer. You must show:
- The other driver was at fault. Your recovery is reduced by any share of fault assigned to you, and barred for noneconomic loss if you were more than half at fault. See comparative fault.
- Your injuries meet the serious impairment threshold for pain and suffering.
- Your damages, including excess medical and wage losses.
Expect the same tactics a liability insurer uses: recorded statements, records requests and an exam by a doctor the insurer chooses. Your insurer owes you a contract, and we hold it to its terms.
Underinsured claims step by step
- Confirm the at-fault driver’s limits in writing.
- Notify your own insurer of a potential UIM claim right away.
- When the at-fault insurer offers its limits, send the offer to your UIM insurer and request consent to settle, if your policy requires it.
- Settle with the at-fault driver, then pursue the UIM claim for the balance, up to your UIM limit.
Skipping step 3 is one of the most expensive mistakes in Michigan auto cases.
Do you have it?
Check your declarations page for lines labeled “uninsured motorist” or “underinsured motorist” and their limits. Also check policies of relatives you live with, since many UM policies cover resident relatives. Our guide to reading your declarations page shows where to look.
Send us your policy and we will tell you what it covers and which deadlines apply.
Sources: Rory v Continental Insurance Co (Mich, July 28, 2005); McJimpson v Auto Club Group Insurance Co (Mich App No. 320671, 2016); MCL 500.3009; MCL 500.3135; MCL 600.5805.
Questions people ask us
Is uninsured motorist coverage required in Michigan?
No. UM and underinsured motorist coverage are optional. The Michigan Supreme Court has said UM is not compulsory coverage under the no-fault act, so what it pays and when is set by your policy.
How long do I have to file an uninsured motorist claim?
Whatever your policy says. Some policies require notice within days and a lawsuit within a period shorter than the three-year statute that applies to suits against drivers. Courts enforce clear contractual deadlines as written.
The at-fault driver offered their policy limits. Can I just accept?
Not before checking your underinsured motorist coverage. Many policies require your insurer’s written consent before you settle with the at-fault driver, and settling without it can forfeit your UIM claim.
Do I need a serious injury to make a UM claim?
Most Michigan UM policies pay only what you could have recovered from the at-fault driver. That usually means proving the driver was at fault and that you meet the serious impairment threshold for pain and suffering.