If you get into a car accident but it wasn't your fault. most circumstances, you'd file a claim with the at-fault driver's car insurance company, get your car repaired, and recoup compensation for any lost wages and medical expenses. No out-of-pocket expenses to you.
But in some cases, the driver who sideswiped you doesn't have car insurance, or at least doesn't have enough of it. This happens more than you might expect. The Insurance Research Council estimated that about 1 in 8 drivers were uninsured in 2012. And minimum liability requirements don't always offer enough coverage after a car accident.
When this happens and you don't have uninsured or underinsured motorist coverage, you'll need to pay out-of-pocket for damages and medical expenses not covered by the other driver.
The difference between uninsured and underinsured coverage
Uninsured motorist coverage protects you if you're in an accident with an at-fault driver who doesn't carry liability insurance.
Underinsured motorist coverage, on the other hand, steps in when you're in an accident with an at-fault driver whose liability limits are too low to cover the damage or medical expenses. The at-fault driver's insurance will typically pay for all damages up to the policy limits, and then your underinsured motorist coverage will cover the excess amount up to the limits you select.