Updated July 2026
What Is Uninsured and Underinsured Motorist Coverage Insurance?
Uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) protect you when another driver causes an accident but lacks insurance or carries limits too low to pay for your medical bills, lost wages, and vehicle repairs. UM applies when the at-fault driver has zero insurance; UIM applies when their liability limits fall short of your total damages. New Jersey law requires carriers to include this coverage on every policy at limits matching your liability coverage unless you sign a rejection form, making it one of the few states where UM/UIM is default rather than optional.
- A driver with no insurance rear-ends your car at a red light. You suffer $18,000 in medical bills and $7,000 in vehicle damage. The at-fault driver has no liability coverage to pay your claim. Your uninsured motorist bodily injury coverage pays the $18,000 in medical expenses up to your policy limit, and uninsured motorist property damage (if included) pays the $7,000 vehicle repair after your deductible.
- A driver with New Jersey's minimum $15,000 per person bodily injury limit causes a crash that leaves you with $45,000 in medical bills and lost income. Their liability policy pays its $15,000 limit, leaving a $30,000 gap. Your underinsured motorist coverage pays the remaining $30,000 up to your UIM policy limit, minus the $15,000 already received from the at-fault driver's insurer.
- Another driver sideswiped your parked car and fled, but a witness recorded the license plate. Police identify the driver, who has no insurance. Your uninsured motorist property damage coverage pays for the $4,200 repair after your deductible, because the at-fault driver was identified even though they left the scene.
Who Needs Uninsured and Underinsured Motorist Coverage Insurance?
New Jersey drivers should carry uninsured and underinsured motorist coverage at limits matching or exceeding their liability limits, especially if they have significant assets, high medical costs, or family members who rely on their income. Approximately 14 percent of New Jersey drivers operate without insurance despite the state mandate, and many more carry only the minimum $15,000 per person liability limit, which falls short in any serious injury accident. Because New Jersey includes this coverage by default and the cost is low relative to the protection, most drivers benefit from keeping it rather than signing a rejection.
If the at-fault driver in a serious accident has no insurance or only $15,000 in coverage, will your health insurance and savings cover the gap between their liability limit and your total medical bills, lost income, and vehicle damage? If the answer is no, keep your UM/UIM coverage at limits high enough to replace that gap. If you would struggle to pay a $30,000 medical bill out of pocket after the other driver's insurer pays its limit, your UM/UIM coverage should be at least $50,000 per person.
How Much Does Uninsured and Underinsured Motorist Coverage Insurance Cost?
Uninsured and underinsured motorist coverage typically adds $5 to $12 per month to a New Jersey auto policy, or approximately $60 to $145 annually, depending on your selected limits and whether you include property damage coverage.
- Your UM/UIM coverage limits — higher limits cost more, and New Jersey defaults to matching your liability limits unless you select lower UM/UIM limits in writing.
- Whether you include uninsured motorist property damage (UMPD) — bodily injury coverage alone costs less than bundled bodily injury and property damage.
- Your county's uninsured driver rate — areas with higher percentages of uninsured motorists see slightly higher UM/UIM premiums.
- Your liability coverage limits — because New Jersey ties UM/UIM minimums to your liability limits, increasing liability automatically increases UM/UIM unless you reject the higher UM/UIM limits.
- Stacking options — if you insure multiple vehicles on one policy, stacked UM/UIM coverage (which combines limits across all vehicles) costs more than non-stacked coverage.