Underinsured Motorist Protection

Life Insurance - Underinsured motorist protection pays you for damages that exceed the payment limits carried by a driver who is considered underinsured. UIM will only pay up to the limits of your policy after subtracting the amount paid by the other driver's insurance. This means that the amount listed as your UIM limit is the total amount paid by both insurance companies, not the additional amount your company will pay after the other driver's company pays.

Both UM and UIM apply to you and any passengers in your car, and to you and others listed on your insurance policy (including family members) when in other cars.
Uninsured Motorist Property Damage

Uninsured motorist property damage (UMPD) coverage may seem strange, especially considering many people already have collision coverage on their car insurance. However, for careful drivers who don't have collision coverage, UMPD can be a good way to protect their car from uninsured drivers without raising their premium a lot. 

In addition, a lower deductible for UMPD is frequently cheaper than collision coverage with the same low deductible. UMPD does not apply in hit-and-run accidents, because UMPD coverage is cheaper than collision coverage-making it very tempting for some drivers to make a "hit-and-run" claim under their UM coverage instead of their collision coverage, or to purchase UM coverage and not have collision coverage at all.
Uninsured Motorist Bodily Injury

Uninsured motorist bodily injury (UMBI) protection can help you in another way. "Let's say you're a pedestrian. If you carry this coverage and you get hit by a car while you're trying to cross the street, the coverage could pay your medical expenses and lost wages," says Gorman. That could be important, because even if you have medical payments coverage and health insurance, those still won't pay for lost wages. 

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You could get coverage for your lost wages by purchasing disability insurance, which many people have through their employer, but it would not cover your passengers or family members, and could disappear if you switch jobs. In addition to protecting you as a pedestrian, UM/UIM can also protect you and your family members traveling in other cars. As Nicole Mahrt of the American Insurance Association says, "You probably can't afford to drive without it."