Uninsured Motorist
Coverage protecting the insured when injured by a driver who carries no liability insurance or is a hit-and-run driver.
What It Is
Uninsured Motorist (UM) coverage pays for bodily injury (and in some states, property damage) sustained by the insured, employees, or passengers when the at-fault driver has no liability insurance or is a hit-and-run driver. In most states, UM coverage is mandatory or must be offered with a written rejection required to decline it.
UM coverage on a commercial auto policy protects the named insured, employees, and passengers while occupying a covered auto. It also typically covers the named insured and family members when struck as pedestrians. The coverage mirrors what the at-fault driver's liability policy would have paid if they had been insured.
UM limits are usually offered up to the policy's liability limits. Many states have specific requirements regarding UM coverage, including whether it must be offered, minimum limits, stacking provisions, and whether it covers property damage in addition to bodily injury.
Why It Matters for Brokers
An estimated 12-14% of drivers in the US are uninsured, and the percentage is significantly higher in some states. Brokers must understand state-specific UM requirements—failure to offer UM coverage where required, or failure to obtain a proper written rejection, can result in the court imposing UM coverage at the policy's full liability limits by operation of law. This is a frequent source of E&O claims against brokers.
Real-World Example
A company employee is struck by an uninsured driver while driving a company truck, sustaining $185,000 in injuries. The company's commercial auto policy carries $1M liability limits but the broker failed to include UM coverage and did not obtain a written rejection as required by state law. The court imposes UM coverage at $1M by operation of law. The insurer must pay the $185,000 UM claim and then pursues an E&O claim against the broker for the oversight.
Common Mistakes
- 1Failing to offer UM coverage in states where a written rejection is required, resulting in courts imposing coverage by operation of law at full policy limits.
- 2Not understanding stacking provisions—some states allow UM limits to stack across multiple vehicles, dramatically increasing the carrier's exposure.
- 3Assuming UM and UIM are the same coverage when they are separate in many states and require independent elections and rejections.
How brokerageaudit.com Handles This
brokerageaudit.com's Policy Checker cross-references the policy's garaging state with UM/UIM requirements. If UM is required but missing, or if a written rejection is required but not on file, the system generates a compliance alert. The platform maintains an updated database of all 50 states' UM/UIM requirements and automatically applies them during policy review.